Tasks before the new FIRS boss (1)

The federal government has its eyes on the agency saddled with collection of taxes in Nigeria. It is evident that the government realizes that taxation is the only source of sustainable revenue to finance government expenditure.

The recent appointment of Babatunde Fowler, who was until his appointment the executive chairman of the Lagos State tax agency, attests to this. One of the achievements of Fowler in Lagos was his ability to increase the state’s tax revenue. He was reputed to have increased the state’s tax revenue over 500 percent from a mere N3.6 billion per month in 2006 to about N20.6 billion per month in 2014.

While this is a laudable feat, it came with lots of anomaly. While increasing tax revenue is important, the taxation process must be seen to be simple, transparent, efficient and humane. Delivery must be qualitative such that encourages voluntary compliance.

There is no doubt that Fowler is eminently qualified for this job. It will, however, be foolhardy to think that increasing revenue is the agency’s only problem.

For an agency as old as the FIRS, enough has not been done to simplify and make the taeconoprocess efficient. It is instructive to state here that the Nigeria Inland Revenue Department was carved out of the then Anglo-Phone Inland Revenue Department in 1943 and established as an autonomous body with W.A. B. Carter appointed as its first commissioner.

Recent data show that a major part of the revenue collected has been from the non-oil sector. In the third quarter of 2011, the total revenue collected was N1.4 trillion out of which N888 billion, representing 63 percent of total collected, came from oil while the remaining 37 percent came from non-oil sector. The last couple of quarters have seen a sharp drop in the oil-related revenue. In Q2 of 2015, total collection amounts to N746 billion out of which N610 billion, representing 82 percent, came from the non-oil sector while a paltry 18 percent came from oil.

With his appointment, Fowler must begin to focus on increasing the revenue from the non-oil sector, simplifying the tax laws, eliminating multiple taxation, integrating the state and federal taxes as well as sensitizing the public on the different types of taxes, when they are due and how they should be paid.

I have outlined below the continuestasks that, in my opinion, Fowler must attend to as a matter of urgency in addition to other issues bedevilling the agency.

Clarification on TIN & JTB TIN
The tax identification number (TIN) which came into effect in 2008 was seen as a bold step in the right direction for effective tax collection. It has no doubt led to an improvement in the tax administration in the country. Recently a joint tax board TIN (JTB TIN) was introduced; this will eventually relax the TIN which was also introduced not too long ago. These policy somersaults have adverse effects on the tax process. The intervention of the JTB to curb the issue of multiplicity of taxes has yielded little results. The introduction of the JTB TIN continues to cause frustration for businesses and individuals. The FIRS should educate the public and clarify its position on this.

Better access to information
The FIRS must ensure that the taxpayers’ right to know what they need to do to comply with taxation laws is not denied. The taxpayer is entitled to clarity and explanations of tax laws and procedures. Currently the FIRS website, one of its major platforms for information dissemination, does not reflect this. In addition to publications, the website must be improved to become user-friendly as well as a platform where answers to most of the tax questions are provided.

Improved qualitative service
In a bid to become more taxpayer-focused and enhance voluntary compliance, the FIRS created the Taxpayer Services Policies Processes and Programmes Department (TSPPPD) in 2011. The creation of this department has seen little or no improvement in the provision of qualitative services to taxpayers. Efforts must be made by the FIRS to ensure that the taxpayers receive prompt, courteous and professional assistance in all their dealings with the tax office. Taxpayers should be able to escalate unanswered or unresolved enquiries to supervisors or management with ease. For this to be achieved, adequate training must be provided to frontline staff to make them aware of their responsibility to the taxpayers.

As part of providing a qualitative service, a functional, reliable and effective service complaint desk must be created. Taxpayers aggrieved by the conduct of the FIRS should be able to file a service-related complaint.

The complaint must deal strictly with the service provided. The complaint process must be open to escalation upwards to the Taxpayer Ombudsman which the FIRS refers to as the Office of the National Taxpayer Advocate.

Promote taxpayers’ rights
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the FIRS. The FIRS should promote and publish the taxpayers’ rights to them. A taxpayer’s bill of rights should be enacted if not in place. The taxpayers must know about their right to be informed, right to pay not more than what they are eligible to pay, right to appeal FIRS decision, right to privacy and confidentiality and a right to a fair and just tax system. The taxpayer bill of right must include in it a role for the taxpayer advocate or Ombudsman who will act as an advocate for taxpayers. The FIRS currently maintains an Office of National Taxpayer Advocate.

Efficient appeal process
Taxpayers are entitled to a fair and impartial administrative appeal of FIRS decisions.

Olutuyi writes from Calgary,
Alberta, Canada.