The Politics Of Omoigui–Okauru’s ‘Sack’

Sunday, 05 June 2011 00:00

MATHIAS OKWE

GUARDIAN

Sunday Magazine - Newsfeature

She Has Not Received Any Dismissal Notice, Says Aide

Last Thursday, a national daily reported that Executive Chairman of the Federal Inland Revenue Service (FIRS), Mrs. Ifueko Omoigui-Okauru, was sacked by President Goodluck Jonathan. But investigations at the weekend revealed that the story was not true after all, as she has not been informed of the dismissal. MATHIAS OKWE of The Guardian’s Abuja office examines the development and its consequence on the ongoing tax reforms introduced by Okauru.

WHO’S afraid of Okauru, the woman who has succeeded in raising tax revenue from a little above N600 billion generated yearl before her appointment in 2004 to almost N3 trillion in 2008? This was the question on the lips of most Nigerians, who reacted to the taxation czar’s purported sack last Thursday, as carried by a national daily.

Since Thursday when the story broke, none of the stakeholders concerned have come up to either refute or confirm the news report, thus throwing the whole country and particularly the staff of the agency into confusion about the validity of the report.

As at press time yesterday, an aide of the Executive Chairman, who ostensibly was embarrassed by the report, told The Guardian that she was yet to receive any letter from the Presidency directing her to vacate office.

According to the source: “She is yet to receive any letter from her employer. I also read it in the newspaper, just as you did. I don’t know the source of the news report; I think you should ask the reporter.’’

Also embarrassed is Danladi Kifasi, Permanent Secretary of the Federal Ministry of Finance. Like the FIRS boss, Kifasi, who is overseeing the Service under the Ministry pending the appointment of a minister, told The Guardian: “I just heard it from people. You know I only started acting on Thursday: I did not meet any correspondence on her purported sack. If they have sacked her as the report claimed, they would ask her to hand over, and I am supposed to know. I think it is just a hoax to divert the attention of the woman from the wonderful job she is doing at the FIRS through the on-going reforms.’’

Attempts to get the newly inaugurated SGF, Sen. Anyim Pius Ayim, to comment on the report were not successful, just like several calls to Director of Public Affairs in the SGF Office were not picked.

To those interested in the developments at the Revenue House, the purported sack of Omoigui-Okauru, which runs counter to the FIRS Act of 2007, does not come as a surprise. Intrigues leading to the passage and consequent implementation of the Act which wrestled the control of the tax agency from bureaucrats and the attendant power play that greeted the renewal of her tenure also notable factors. Going by the Act, Omoigui-Okauru would be vacating office on May 3, 2012.

The FIRS boss has long built a reputation for herself as an incorruptible leader. A frequently heard complaint about Omoigui-Okauru – which she should take as a compliment – is that she is unwilling to play ball. Her success is proof that it is possible to hold public office in Nigeria without abandoning one’s core values.

Perhaps, this would explain the torrents of on-line comments by Nigerians following the purported sacking of the First Class Honours, accountant and technocrat, by President Jonathan in an era that everyone is craving for more technocrats on his team.

One of them, Mallam Maikasuwa, an Abuja based policy analyst wrote: “In spite of the pervasive rot in the Nigerian public service, there are many people like Omoigui-Okauru who are working quietly to change their own little corners of Nigeria, reformers whose revolutions are never televised because they don’t hug the limelight. Omoigui-Okauru has decided to let her work speak for her. While such a low profile style may be a virtue, it has robbed the Nigerian public of a full appreciation of what is being done on their behalf at FIRS. This is why some of us have decided to blow her trumpet for her. Nigerians should know and appreciate the giant strides at FIRS. They have to realise that their country is not as hopeless and irredeemable as they like to think, that there are unsung heroes across the length and breadth of this potentially great nation who offer hope of a brighter future.

“In the five years of her stewardship at FIRS, tax collection has been fully automated, thousands of staff trained and retrained, hundreds of fraudulent staff have been flushed out of the system, a major part of the tax administration process has been computerized, tax offices are being modernised and equipped to create a healthy working environment, staff salaries and remunerations have been reviewed upward to encourage workers to give their best to the organisation, and a system of reward and punishment has been instituted to encourage good conduct and discourage criminality. There is now a better coordination between revenue authorities in the state and local governments and their counterparts at FIRS through the joint tax board, which meets regularly to harmonize policies and to find solutions to common challenges.

“One of the major planks of the recent tax reform is to have a simple tax system with low tax burden. Rather than have a multiplicity of taxes, the reform calls for a few broad, clear and well-defined taxes so that tax payment can be made simpler while achieving desired results. Omoigui-Okauru and her colleagues in the joint tax board have waged a serious campaign against multiple taxation, arguing that it is unconstitutional and that it constitutes a disincentive to investments. She has also reoriented her staff to treat the taxpayer as king. Not only should the taxpayer be treated well, she has also made a case for the tax administrator to be treated fairly by the various governments. The various tiers of governments, she has argued, should invest adequately in its revenue collection systems. She has called for good governance, greater transparency and accountability in the use of taxpayers’ money by the governments so as to encourage people to
pay taxes voluntarily.

“Expectedly, one of her most controversial policies so far has been the decision to abolish tax consultants in tax administration, particularly where such consultants take over the work of the tax officials. Tax consultants and other agencies/ministries should not be used to collect taxes, she has insisted. The State Board of Internal Revenue is well equipped to collect taxes in all the states. The use of tax consultants, she has explained at various forums, has contributed greatly to the rising cost of tax collection in Nigeria. Cost of collection is estimated to be between 25 per cent and 35 per cent of internally generated revenue, whereas in advanced countries and even in some African countries, the cost of tax collection ranges between 3 per cent — 5 per cent.

“For daring to challenge the relevance of the tax consultants and to advocate the strengthening of the state tax authorities to be able to perform their statutory roles, tax consultants selfishly mounted a campaign of calumny against Omoigui-Okauru. Having failed to stop her re-appointment to a fresh term of office last year, they have now resorted to a smear campaign, using professional petition writers and conmen to besmirch her good name. They peddle blatant falsehood to ignorant members of the public. For instance, most people do not realize that FIRS staff have no access to taxes collected as they are all paid directly to the relevant Federation and other Revenue accounts at the Central Bank of Nigeria. Even funds earmarked for the running of the agency (four percent of the total non oil taxes collected by the agency in a year) cannot be used other than for what has been budgeted for. The FIRS allocation is audited annually as required by the
law. The agency must fully account to Government and the Public the manner in which these funds have been utilized while all un-utilized funds have to be returned to the Federation Account and the Revenue Funds from which they are derived.

“The FIRS boss has remained undaunted, carrying on with her revolutionary changes in tax administration. Under her leadership, four of the eight bills submitted to the National Assembly were passed and signed into law in April 2007. They are the FIRS Establishment Act, VAT Amendment Act, National Automotive Council Act, and the Companies Income Tax Act. The passage of the four laws represents the first comprehensive amendment to tax laws in two decades and it is expected to further enhance efficiency and effectiveness of tax administration. The FIRS Act in particular is expected to have a fundamental impact on tax administration in Nigeria since it will ensure that the agency is effectively funded and that its ability is greatly enhanced to collect more revenue, recruit and pay for the appropriate complement of staff as well as provide the right working environment for staff.

“For the first time in the history of tax administration in Nigeria, an automated and fully integrated system that has ensured that taxes collected daily by the FIRS from all parts of the country are swept automatically, electronically, into the Central Bank of Nigeria (CBN) through the collection banks. This has largely addressed the issue of trapped funds in banks and reduced fraud in the collection system. Automation gives the Federal Government real time, almost minute-by-minute report on taxes collected by the FIRS. Cases of trapped or unremitted funds, running into about N12 billion were rampant when the FIRS operated the manual system.

“Recognising that real time data and information are the live wire of any tax agency, the new FIRS has developed a robust tax payer database and registration process to support effective taxpayer assessment. The agency has also come out with the unique Taxpayer Identification Numbers (TIN) for every taxpayer. A tax card scheme that will provide a one-stop access to taxpayer records and with which taxpayers could pay taxes has also been developed. The objective is to provide a clear idea of how many registered companies and individuals pay tax, which will then enable effective strategies to be developed to close all identified tax gaps.

“Large tax payers especially those in the oil and gas and other large sectors are being audited just like other agencies of government charged with the responsibility of collecting taxes on behalf of the FIRS. These steps have yielded about N40 billion in tax arrears to the Federation Account for appropriation.

“With the promulgation of the Federal Inland Revenue Establishment Act 2007, Tax Appeal Tribunals have been established to provide for a robust and efficient dispute resolution for all taxes. The tribunals provide taxpayers with the opportunity for redress if dissatisfied with their assessments. Beyond this, taxpayers can also appeal the decisions of the tax authorities at the Federal High Court, Appeal and Supreme Courts. In response to several complaints by taxpayers, the FIRS now has provision for refund to taxpayers within 90 days. Efforts are also being made to educate the taxpayers on these changes and on their duties and obligations.

“A clear, well articulated national tax policy encapsulating the principles guiding taxation in the country has been developed. The new national tax policy is aimed at better planning and consistency.

“The reorganisation of the operations of the FIRS has led to the merger of offices and creation of one-stop-shops for improved service delivery to the tax payer. This has lessened the burden of taxpayers who can now transact their tax business at a single point instead of going to different tax offices for different services. The merger of offices has also provided improved career opportunities to FIRS staff to be more rounded tax professionals.

“The reorganization of FIRS has created jobs and career opportunities of over 2,000 in specific skill driven areas. Omoigui-Okauru has said repeatedly that the focus of the tax agency is to grow job opportunities as required to improve service delivery. Staff without the required skills are being encouraged to acquire the necessary skills through both institutional support for training as well as counselling of the need for staff to recognize the need for them to personally improve their competence levels. She has said that the challenge of the FIRS and indeed all revenue authorities is to get more of the skilled staff required to drive improved performance. With the requisite complement of staff, properly aligned to their areas of strength and interests, the performance of the FIRS and state internal revenue boards would be significantly boosted.

“About 4,400 management, senior and junior staff (out of the current 5,600 staff in place), have enjoyed specialized and industry/issue specific training and study tours, within and outside the country in the past five years. In the past, most staff did not receive training for over ten years. In addition to training, there has been considerable improvement in staff remuneration through the new salary scheme approved by the National Salaries and Wages Commission in April 2007. The improved welfare package is to motivate FIRS staff to higher performance.”