For three years now, the Rivers State government has worked hard to automate and digitalize its revenue collection and management operations, hoping to make internally generated revenue (IGR) the backbone of its revenue base. This dream was realized with the commissioning of an optic fibre-based Tax Management Software (TMS) last week Thursday.
The state government was elated that the task of targeting up to N10 billion from IGR every month would be realizable. By 1999 when democratic rule returned to Nigeria, the then new administration led by Peter Odili met a mere N250million per month as IGR.
The governor worked hard to up this to about N2.5billion average. The current governor, Chibuike Rotimi Amaechi has now moved this to as high as N5billion in December 2011, though the year's average was put at N2.6nillion, according to governor's account to the people via the 2012 budget presentation. The determination to realize high IGR target of about N10billion monthly seems to inform his choice of finance commissioners. Now, the task is headed by a Wall Street financial practitioner and expert, Chamberlain Peterside, who seems to sleep and wake thinking of IGR. The problem has been that what is collected from tax payers and companies is hardly properly remitted and accounted for.
Also, there are several hands in the broth, leading to multiple demand notices for agents to the business community. There is equally loss of confidence and sometimes exodus of businesses to Lagos and other -tax-friendly locations. The worst is under-declaration by companies caused by collusion between assessing agents and the companies. Amaechi's dream has been to sanitize the revenue collection system so that workers residing in the state can remit their taxes within, to create single collection mode and instill confidence in companies, and to ensure that every Naira collected is paid into government coffers. Amaechi seems convinced that if all revenue is collected and properly accounted for, Rivers State could hit up to N20billion monthly. The governor began by restoring security so businesses can thrive again.
This seems to be a huge success as fleeing companies are back and the likes of Nigerian Liquefied Natural Gas (NLNG) that have mass revenue base have moved over to Port Harcourt. The governor also banned revenue bands that used violence. This was part of a deal with the state's chamber of commerce. This has restored huge sanity in the state. He also enacted a law banning youths who ripped off developers by demanding numerous fees. Imprisonment without option of fine is the penalty. Now, the next effort seems to be the installation of optic fibre-based Tax Management Software (TMS) that has automated and digitalized the IGR system in the state.
BusinessDay gathered that a tax-payer can start and end his tax transaction with the Rivers State Board of Internal Revenue (RSBUR) without making any human contact. This must be cause of the huge excitement at the BUR offices on Moscow Road in Port Harcourt last week. There, the governor unveiled the state's new tax management software, a joint venture with Skye Bank. Governor Amaechi, who was represented by Peterside, said that "Revenue from IGR sources should form an integral part of our own financial system, more to minimize the reliance on Federal Allocation. We need to leverage on the power of technology, modernize and improve, and that is what is happening today." The Governor expressed hope that the computerized tax management software would help check revenue leakages in the state. He said: "Information Communication Technology (ICT) is a leveler; it is a great enabler.
Also, we did not want to be left behind in the modern world that we live in. It will minimize sharp practices, tremendously increase efficiency and it will mean more revenue for the State." He went on "With the uniqueness of this project, we should be able to at least cover the state's operating revenue from Internally Generated Revenue, (IGR), get at least half of all our revenue from internal sources. This is going to be a wonderful great legacy of this administration because by the time we leave office: this platform will still be there for the succeeding administration."
The Special Adviser to Governor Amaechi on Internal Revenue Generation, Nwankwo Nwankwo, said; "This singular project will change the face of revenue drive and tax management in this oil-rich state. The Governor gave the free hand to the board and gave huge support to us. Skye Bank's energetic drive and the resources they have put into this project to bring us to where we are today are commendable." Now, a tax-payer could log on to the Board of Internal Revenue (BIR) website, carry out self assessment, pay online, and print out a receipt. Government officials think this would almost eliminate human interference in tax payments and remittances.
The commissioner also said the successful roll-out of the TMS and the N5billion IGR per month by December 2011 was a vindication of the decision by the governor to engage Skye Bank. The computers and other software for the automated revenue collection and generation process in the state were provided by Skye Bank in partnership with the State Board of Internal Revenue. In his remarks, the Regional General Manager of the bank, Chike Memeh, said Skye Bank Plc entered into a partnership with the Rivers State Government because it saw a state with a clear conviction and vision.
The finance boss, Chamberlain further said efforts were made to sustain the transition so that at no time should the state return to the analogue method and human collection of taxes. Lending his view, Alaliba Dokubo, chairman, BIR expressed great joy, saying the board was proud of the automation and digitalization of its operations. She said Governor Amaechi was indeed an innovative chief executive whose determination for modernity was unequalled. The Nigerian Joint Tax Board (JTB) ICT Programme Advisor, Oduba Oduba, in his explanations, said Rivers State had moved far ahead of most other states in upgrading to TMS, saying BIR would now easily interface with the JTB.
At the commissioning, various processes and stages of managing the TMS were reviewed and more suggestions made. The Special Adviser on ICT, Goodliffe Nmekini, said tax payers can now register and obtain their tax identification number (TIN) online in Rivers State. The tax administrators will not only have a spread view of tax payers and corporate revenue points in the state but can also correctly predict IGR expectations and query shortfalls. The tax administrators in Rivers State can also share information on tax payers all over Nigeria and have easy track on revenue points.
BusinessDay gathered that the new method would eliminate multiple tax collection drives and trauma to business operators; some of who were frustrated out of the state due to nightmares arising from numerous tax assessment and collection teams. Also, whatever is collected would definitely get to the state government's coffers now without diversion by revenue collectors and managers handling the books. Of all the objectives, the one not easy to address seems to be the matter of collusion and under-assessment.
Here, assessing agents collude with company chief executives and their accounts managers to pay far less than assessed amounts into government coffers and turn round to split the huge leftover. Sometimes, government gets about N20million while the colluding others share over N60million from one tax account. The special adviser on ICT said no computer on earth can go beyond what is fed into it, an indication that stopping the assessing agents could still take a long time to come, and cannot be left for the TMS.
He however said a new law was in the offing that may prescribe stiff penalties to those who colluded. "If someone knows he may go to jail, he would ask his people to pay correct tax", Nmekini stated. The lawmaker in charge of IGR in the House of Assembly was on hand to assure of swift action should the piece of legislation arrive the floor of the state's House of Assembly. Governor Amaechi had relied on the coming TMS to predict brighter IGR future in 2012 budget. He also hoped on the move over of NLNG to the Garden city. For this reason, he said the state would continue to create an environment conducive for investment and employment.
The state hopes to garner N65billion from IGR to finance its N427billion budget in 2012. The IGR was only able to generate an average of N2.6billion in 2011, and by end of September that year, according to the governor's budget presentation, IGR accounted for over N26billion. With the new TMS, when effectively operational, IGR grossing is expected to increase tremendously and help finance almost all government operating cost.
