Paying Tax in the Nigerian society has always been a thorn in the neck for governments, especially in the northern states, who apparently require their citizens to inculcate the habit of paying tax with the uncertainties inherent in federal grants which accounts for over ninety percent of most state governments’ budgets. In this interview Salisu Alhassan Bichi took up the chairman of Kano State Board of Internal Revenue, who is also a veteran tax administrator, Habu Muhammad Fagge who has contributed immensely in the formulation of most of the country’s tax policies.
As a veteran Tax Administrator, what would you say are the challenges of tax collection in the Nigerian society and what has been your experience since you assumed office as the Chairman of the Kano State Board of Internal Revenue?
All I can say is that tax administrators and their support staff run the most difficult task in the nation’s scheme of things. We are the only single public service organisation in the country which receives from the second person on behalf of the government without necessarily giving any value in return.
In essence, there exists no quid-pro-quo relationship with the payee like in other public sectors. It is therefore hard to convince the general public that you are there for their own good, like in other developed societies, who are fully oriented on the fact that only two things are certain; which are death and tax.
I started tax administration in the year 1977 as an Assistant Executive Officer. I rose through the ranks – E.O, HEO, SEO, PEO, then Inspector of Taxes, State Collector, Director Planning, Director other Taxes, Director Finance and Management before being appointed Executive Chairman, Kano State Board of Internal Revenue for the first time in 1994.
After 5years in the position, I left in 1999 at the onset of the third republic politics. I was re-appointed in June, 2011 to head the board as chairman.
Amazingly, when I assumed office, the office I had known? for the better part of my life, I discovered that all records, ledgers, tax files, payment records, including cash books and unused tax forms had been packed and sold to a recycling company that produces toilet papers at the cost of N4,100 (four thousand one hundred naira).
As you can see, right now, it is like we are rebuilding the Kano State Board of Internal Revenue, rebuilding the data base, without which no finance authority can exist. I have invited stakeholders, employed extra hands and we are now going house to house, road by road collecting records on Pay As You Earn, Direct Assessment, Withholding tax, Land Rates, Dividends, Rich cases, Contract and Expatriate Taxes and we are getting incredible results.
What efforts are you making to harmonize Ministerial, Departmental and Agencies (MDAs) revenue so that you can have absolute control on the Internally Generated Revenue (IGR) or Global Revenue?
Statutes and laws of this country have given us powers to supervise and control all monies collected on behalf of the state government. That is why we are technically referred to as Board of Internal Revenue and not Board of Taxes. We run internal revenue services. We have powers over all revenues accruing to the state government.
In my present plan, we now want to exercise those powers to the maximum, just like office of the Head of Service that posts Permanent Secretaries, Directors and other administrative staff, like the Ministry of Finance that posts Accountants and finance officers, like the Audit Department that posts Auditors.
We are now going to post Revenue Officers to all Ministries, Departments, Agencies and the 44 local government areas of the state, to ensure complete compliance with all deductions and taxes payable to government and channel it to the right course. We have already started with the local governments and ‘pay as you earn’ alone, accruing to the government has multiplied more than five times since we started.
What are the major problems you faced in the course of enlightening the Kano public on the need to pay their taxes especially with the age old apathy on traditional tax collection methods?
Actually, in Kano State, where before now taxation was used to victimize political opponents during the defunct NPC/NEPU, there was public disdain towards the payment of any form of tax. To make matters worse, during the second republic when the defunct PRP government wanted to abolish community tax, it went out of its way to condemn, in general terms, all forms of taxation, describing it as evil.
Unfortunately, this is the tradition that obtains here. People don’t want to pay even their electricity and water bills not to talk of school fees or hospital cards. I want to use this opportunity to make this abundantly clear that all over the world, there is no place or country that you get everything free like including? education and health care and that is why they developed. No tax, no development. It is as simple as that.
Can we know the position of Kano State government in the hiccup between the Federal Road Safety Commission (FRSC), National Assembly and other stake holders in the sale of new number plates and national drivers licence?
In any case, this is an internal matter for the state governments because it falls under road tax which is controlled by them. The National Assembly came in because of public outcry, due to the modus operandi employed in the financial aspect of the case.
Nevertheless, we in Kano State have never stopped selling, because nobody approached us in writing to that effect and then the state government has loaned money used in producing the plates and drivers licence and as I am talking to you, we have settled almost half of the amount. At any rate, I understand that recently, the National Assembly had setup a committee to harmonize public outcry and what the state governments are after.
Two major contentious issues were identified which are the exorbitant costs some states were charging for, especially the plate numbers and the position of the old plate numbers to the vehicle owners. The general agreement is that some states would be forced to reduce the costs and vehicle owners could retain their old plate numbers if they so wish.
What is your Board doing on the issue of Multiple Taxation in the states and the recently amended Act of Personal Income Tax which had been signed into law by Mr President?
Incidentally, I happened to be as chairman of the committee setup by the federal government to streamline and harmonise multiple and double taxation issues in the mid 90s, we did the job. We identified and eliminated all issues to do with multiple taxations and streamlined the constitutional provisions on tax applicable on all the three tiers of government in the federation.
But today, in a renewed vigour to generate revenue, local governments in the country have created many outrageous means of generating revenues in their areas which immensely affected states and in some instances even the Federal government. I am happy that the Joint Tax Board is coming out with Laws which will transfer powers of collecting taxes to the state governments on behalf of the local governments.
This is a commendable decision because as for me in Kano, any local government that, hitherto, generated like N20million in a month, if the laws come into effect, we can give them N100million per month.
How far has your board gone in the pursuit of revenue and taxes in federal agencies, state departments and local governments?
Most of the problems have to do with ‘pay as you earn’ taxes and the state governor has approved some changes applicable to the state and local government employees where deductions would be made at? source.
This would help in curtailing cases of non remittance of such taxes to the board. Concerning other federal bodies and the private sector, we are coming up will fool-proof methods of ensuring that we get all monies accruable to the state.
There are speculations that your board will introduce motor cyclists (Achaba) taxation in order to improve the revenue base of the state. What is the true situation?
We have come to the conclusion, along with the Motorcycle Riders Association, that there are over N2million commercial motorcyclists in Kano but we could only register forty five thousand. When we get a reasonable figure, the tax intended is N50 only per day.
This would provide jobs for hundred of youths involved in the collection and our forecast shows that? we can generate N25million a day, which comes to N750million per month and you know what that kind of money can do for a state government.
We are globally in the information technology age. What are you doing to digitalise your services?
As I am talking to you now, the Kano State Board of Internal Revenue has been fully automated. We have signed Memorandum of Understanding with thirteen commercial banks, if you pay any type of tax to the Kano State government in any of their branches, we will receive an alert within two minutes and your record will be updated immediately.
Could you give us a situational report on the amount of money collected as taxes by the Kano State Board of Internal Revenue before your current assumption of office and the presumed progress recorded since you started?
I wouldn’t want to go into that for now because over the years, there were several lapses, in some cases outright criminal.
Moreover, I am yet to attain my expected target for Kano State as the second commercial city after Lagos and the first in population density, but as I told you earlier even from the second month of my assumption of office, we have recorded fivefold of the amount realized by our immediate predecessors.