How Gombe Internal Revenue Reforms yields over USD6.0 million grants as Revenue peaked at N10.56 billion in 2021
In the year 2019 with just N6.8 billion annual Internally Generated Revenue (IGR), Gombe State Internal Revenue Service was battling with myriads of problems including lack of administrative and financial autonomy, ineffective governance structure with overriding power of the Executive Chairman with non-Executive Directors; uncoordinated collections by State and LGAs shrouded with multiplicity of taxes; significant revenue leakages; unprofessional conducts; lack of transparency and accountability; and a regime that ignored basic canons of taxation such as equity, convenience, accessibility, economy among others.
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In addition, the GIRS has to cope with an aging workforce; lack of a robust ICT platform that combines all the attributes of e-payment from e-billing, e-filing, e-assessment, e-objections, e-reporting, etc. The absence of revenue offices in other LGAs also undermines effective revenue mobilization in the state.
The report submitted by the committee set up by Governor Muhammadu Inuwa Yahaya on reform of Gombe State Internal Revenue Service, GIRS pointed out other complicated issues which include; impersonation of Revenue Staff; fake receipting by staff and other vendors; collection of revenue in kind. Others are poor administration of motor licensing unit, issuance of fake insurance and vehicles papers, reliance on old revenue types and obsolete rates; inability of the Service to conduct periodic tax audit due to lack of capacity and training; lack of effective collaboration among and between revenue-generating MDAs, lack of taxpayers’ compliance due to deficit of trust and poor communication and citizens’ inability to hold Government accountable due to lack of information.
Governor Muhammadu Inuwa Yahaya on assumption of office on May 2019 said with such a complex situation on ground, his administration has no choice but to embark on a reform of Gombe Internal Revenue Service, GIRS in such a way that it would compete favorably with other states IRS and also generate sufficient revenue for the state. According to him, “with the dwindling revenue to the state governments from the federal government, a serious state government has no choice but to look inward.” Consequently, Mr. Abubakar Inuwa Tata was appointed as Administrator of GIRS and saddled with the responsibility of reforming the organization.
“In the last two and half years while reforming the system, we were able to provide a coordinated collection (harmonization of LGA rates and levies); made the Gombe IRS a sole revenue collection agency, ensure transparent and accountable revenue collections by producing periodic reports on revenue performance; addresses the issue of multiplicity of taxes through codification of tax and revenue types and institutionalization of Joint State and LGA Revenue Committee. We also strengthened internal control process to identify and punish unprofessional conduct; prohibited cash collections by revenue officers; expand the Board Structure of the Service to enhance accountability; encourages voluntary compliance through tax education, palliatives and tax concessions; give legal backing to LG Revenue Committee; provides a platform for the Implementation of Treasury Single Account (TSA); replaces old and obsolete rates inherited from Bauchi State; provided new tax heads emerging from the evolution of economic activities; redefined the state into urban, semi-urban and rural areas to ensure equity in tax administration; classified businesses into Micro, Small and Medium enterprises to properly delineate entities from each other in the implementation of presumptive tax regime; among many others,” he said.
Tata said his major achievements in the GIRS can be viewed from two dimensions – revenue generation and reforming the GIRS which attracted grants from the World Bank.
“On revenue generations, we sponsored a complete wholesale review of the entire Revenue Administration Law 2018 to Gombe State Revenue Codification and Consolidation Law 2020, reviewed obsoletes rates, fees, fines, levies, and charges which enhanced collections by the Service in collaboration with the MDAs; streamlined revenue generation process resulting in a clearly delineated revenue heads of the State Government away from revenues collectible by the 11 LGAs; improved revenue outturn from N6.8 billion in 2019 to N8.6 billion and N10.5 billion in 2020 and 2021, respectively; successfully completed the back duty audit of N1.0 billion and N4.9 billion as an established, undisputed and agreed amount to be collected this year and or early next year,” he said.
He said we also successfully completed a back duty audit of N1.0 billion and N4.9 billion as an established, undisputed and agreed amount to be collected this year and or early next year and initiated another N5.9 billion back duty audit against one of the most profitable entity in Nigeria.
The new Management inherited a highly indebted Service just like the state government with poor governance structure that undermines collections. The Directorates in the Service were manned by Non-Executive Directors which affect internal governance.
“We empowered the Directorates in the Service to be headed by Executive Directors by amending the Service’s enabling law, we unbundled the existing Departments from eight to thirteen to enhance efficiency in service delivery. We drafted the mission and vision of the Service to reflect the current vision of the state government of a transparent and accountable modern institution capable of mobilizing sufficient revenues and being managed by professional staff.
“On staff motivation, we met a system that reward mediocrity and poor compensation system that encourages wrongdoing with significant cases of absenteeism and lateness to work; irregular payment of staff allowance which we inherited about six months backlog; lack of training and retraining of staff; little or no learning opportunities and motivation to work extra hours. We introduced a performance-based allowance for staff that meet their revenue target from irregular 50% to 100% of their basic salaries across all categories of staff; streamlined benefits system to support staff most in need; regularized employment of about eight staff members who were working in the Service without a letter of employment.
“We also created learning opportunities for staff who want to become members of professional bodies by reimbursing staff with total amount of all receipted expenses during such training that the Service approved, which saw an increase in the number of professionals from about two (2) to ten (10); trained about 467 staff in 39 thematic areas with some trained more than once a year; increase allowances for non-accountable cash advances for all categories of staff, introduced local NATA and weekend duty allowance to meet revenue targets,” he said.
On the Service relationship with third – party consultants, vendors and MDAs, Tata said his management met a system that rewarded consultants as much as 25.0 – 30.0 percent of collections or recoveries made and, in some cases, the revenue has to go to the consultant account first, before the consultant settles with the government. “We immediately invited all the consultants for a review meeting, discontinued the unwholesome practices and reviewed their commissions/fee down to 10.0 per cent for all categories of consultants excluding the ICT lead consultant which we proposed downward review as the consultant seeks renewal of his contract. We equally reviewed downward the fees being collected by all payment gateways from 1.5 percent to 1.0 percent and put a cap on the maximum amount to be charged per transaction in order to increase the efficiency of tax administration in the state. We also introduced 5.0 per cent cost of collections for all MDAs to enhance collaboration and cooperation.”
On reforming the GIRS and tax administration in the state, the new management was able to provide non-debt financing resources to the Government through the attainment of State Fiscal Transparency, Accountability and Sustainability (SFTAS) Program for Result directly under the Service’s core mandate, which includes, US$2.5 million grant for Covid 19 Tax Concession and Palliatives, US$1.0 million grant for banning the use of consultants in assessment and collection of Personal Income Tax, US$2.0 million grant for successful completion of the Revenue Codification, Harmonization, and Consolidation Law, US$1.0 million grant for the TSA Cash Management Strategy Document and Implementation which the Service worked on and published as the Secretariat of the TSA Implementation and Enforcement Committee, Supported and provided regulations for accessing US$2.0 million grant for property enumeration in the State by capturing and creating G-TIN for 85,759 property owners in Gombe State, thereby effectively bringing the property owners into the tax net; and the likelihood of assessing additional US$1.0 million grant on year-on-year increase in revenue up to 20.0% of which the Service achieved over 26.1 percent.
Other achievements included the IGR Expansion Strategy Document (2023 – 2027) which was prepared by DAI (USAID) for the State Accountability, Transparency, and Effectiveness (State2State) project with active participation of relevant stakeholders in the state. He said the development of this strategy marked the end of reforms and if the strategy is implemented in the short to medium term, it is capable of boosting the State IGR to another historic levels as projected in the Gombe State 10-year Development Plan (DEVAGOM).
The recently constituted Gombe State Revenue Recovery Tribunal is another landmark achievement under the administration of Governor Inuwa Yahaya.
“We initially nominated a magistrate in 2020 law to adjudicate on the issues of tax and revenues but the use of normal judicial system is likely going to delay prompt dispensation of justice and that’s why the Service amended the law in 2021 to institutionalized a special tribunal that would protect both the taxpayer and the tax authority in case of dispute as an independent body. This is likely to enhance accountability and transparency of tax administration in the state while protecting both the taxpayers and the Service,” Tata said.
“The revenue of the state before our arrival at the revenue Service was specifically N6.8 billion for 2019. However, with all the initiatives and the reforms highlighted above, the Service was able to shore up collections to N8.6 billion and N10.5 billion in 2021. This development is not unconnected with the palliatives and concession given to taxpayers during the Covid-19 which act as arrears clearing opportunities for the taxpayers who enjoyed various categories of waivers from 5.0 to 50.0 per cent of their uncleared tax liabilities and continuous engagement of the taxpayers through focus group discussion, tax education program, live television and radio programs, jingles and other electronic handbills among many others,” he said.
On the possibility of the state becoming financially stable and stop relying on monthly federal allocation, Tata said the state has all the potentials to be independent provided the leadership and the governed reach a consensus on how to grow the local economy.
According to him, taxation is about a social contract between the citizens and the government and once both agree to contribute their quota to the development of the state and the government uses these resources efficiently and in a transparent manner through tax for service initiatives, definitely, the state would mobilise sufficient resources for its development.
“The current initiatives of Governor Muhammad Inuwa Yahaya to open up the local economy through the industrial park, the wawa-zange grazing reserves for livestock production, the attractive and friendly business environment and solid infrastructure being laid down are capable of boosting future revenue of the state.” Tata said.
However, the successes recorded so far by the GIRS is not without challenges as some business owners in the state still complain of multiple taxation.
But Tata explained that there is a fundamental misconception of the word “multiple taxation” among both enlightened and unenlightened taxpayers.
“Multiple taxation occurs where the tax, fee or rate is imposed on the same person in respect of the same liability by more than one state or local government council. By this, it means that if the state government is collecting let say “ground rent” from a taxpaying entity, in this case, the liability is ground rent, and a local government council is also collecting ground rent on same person or taxpaying entities, such practice can be termed “multiple taxation”. However, if say a state government serves you with a demand notice on ground rent and local government serves you with a demand notice on tenement rate, that is not a multiple taxation as long as the liability is not same. Therefore, the state internal revenue can serve a taxpaying entity with a demand notice for say business premises, development levy, signage fee, ground rent, fire inspections fee, PAYE, etc and that’s not multiple taxation as long as those taxes and levies are applicable to your operations.”
On why different taxes were introduced especially for commercial motorcycles and kekeNapep riders, the chairman said the GIRS has not introduced different taxes for motorcycles and KekeNapep.
He stated that these taxes are there for long but not domesticated and implemented. “What we did was to domesticate most of these taxes that are in the law of the Federation of Nigeria and legislate them so that the Service can be able to enforce them in the state. That apart, the reason why we conducted the biometric data capture for the motorcycles and tricycles in the state is for security, empowerment and revenue generation.
“You are not unmindful of the fact that the use of okada and keke has been banned in more than ten (10) states in Nigeria. These include Borno, Yobe, Adamawa, Jos, Kaduna, Kano, Katsina, Zamfara in the North due to increasing cases of insecurity associated with their operations. Many of these riders relocated to Gombe state in order to continue with their operations and if left uncontrolled, unchecked and unregulated, they can constitute a security risk in the state as many of them came from different states with different habits and culture. In order to ensure sanity without necessarily banning their operations and sending thousands out of job, we decided to allow them to fend for themselves while putting mitigants on ground. The registration captured both the biometric data of the rider, owner and place of residence within the state using barcodes to identify and trace missing economic assets and owners of those motorcycles and kekenapep used to commit crimes in the state. This enrollment has begun to yield positive results as many people whose keke or okada was stolen were recovered from such a process by scanning the barcode to trace original owners and riders of such moving objects.”
In the mining areas, he said the banning of mining activities particularly illegal mining would not affect revenue generation of the state as the issuance of mining licenses is on exclusive legislative list of the federal government.
“Secondly, the revenue from mining mostly comes in the form of haulage fees which many of the illegal miners doesn’t pay. On whether we do engage consultants, yes. The enabling law has provided room for the Service to engage consultants particularly where the Service has no technical skills and capacity to undertake some of the collections and back-duty audit. Lastly, on the issue of leakages, you can’t block leakages 100 per cent as the sources of the leakages are both internal and external and have over the years become an establishment of its own with lots of vested interest across various stakeholders. But overall, I can tell you we have made tremendous progress on this and the Service has an internal mechanism to address this in our IGR Expansion Strategy Document (2023 – 2027).”
Last year the National Productivity Centre, a parastatal under the Federal Ministry of Labour and Productivity presented a prestigious award of excellence to Mr Abubakar Inuwa Tata as the most outstanding Chairman of State Revenue Service in the country. The Gombe state awardee was formally recognized during the special award presentation summit held at the Nigerian Army resource Centre Abuja.
The Director General of the Centre, Dr Kashim Akor while presenting the award to the recipient, said the National Productivity Centre found Abubakar Inuwa Tata worthy of the award for his resilience in revenue generation, productivity and compliance since he assumed office at GIRS.
“We are celebrating Gombe state today because of the leadership role the Governor, the awardee and his management team have been playing resiliently by steering our nation while deftly navigating uncertainties brought about by economic pressure, security challenges and Covid-19 pandemic among others through initiating of ideas, innovations and investment required to build and nurture Nigeria to a stable and peaceful socio-political entity”.
Speaking shortly after the award presentation summit at a civic reception organized by Gombe State Internal Revenue Services in his honor, Mr. Abubakar Inuwa Tata attributed his achievements to the people – centred and result – oriented economic policies of Governor Muhammadu Inuwa Yahaya as well as the free hand granted him to run the affairs of the institution coupled with support of his management team and other stakeholders operating within the system.
