The
use of tax consultants by government is a drain on its resources and
may be responsible for the inability to record enhanced revenue yield.
Former chairman of
the Federal Inland Revenue Service (FIRS), Kayode Naiyeju, at the close
of the 2011 Revenue Mobilisation, Allocation and Fiscal Commission
(RMAFC) Members’ Retreat in Uyo, Akwa Ibom, at the weekend, said the
preference for tax consultants in the collection of revenues negates
the ongoing reforms in the country’s revenue generation system.
Mr. Naiyeju, a
former Accountant General of the federation, said the practice was also
detrimental to the effort to modernise the tax administration systems
at the grassroots.
“It is unfortunate
that rather than review and update the existing structures for
effective tax drive and collection, states and local governments have
continued to demonstrate total lack of interest in improving their lots
towards improved revenue generation by preferring to use consultants to
administer taxes, rather than to modernise their tax systems for
enhanced revenue yield, and less dependency on allocation from the
Federation Account,” Mr. Naiyeju said.
Improved tax collections
He described
modernisation as the vital ingredient for improved tax collections,
pointing out that such visionary posture would encourage less
dependence on the allocation of revenue from the Federation Account,
which he noted was prone to the vagaries of the harsh economic
environment and political factors.
According to him,
if states and local governments give priority to taxation and other
independent revenue generation sources, their revenue profiles would
receive significant boost, to make funds available for developmental
purposes.
The FIRS Act 2007,
which is meant to centralise revenue collection in the country, does
not recognise the use of consultants in the collection of taxes. The
closest the Act allows for such is in Section 35 where it states, “The
Service has the power to investigate or cause investigation to be
carried out to ascertain any violation of any tax law and may employ
Special Purpose Tax Officers to assist in the investigation of any
offence under the Act.”
Executive chairman,
FIRS, Ifueko Omoigui-Okauru, who has always been in the vanguard of
those opposed to the use of tax consultants by states and local
governments to collect internally generated revenue, recently said such
practices hamper the country’s growth and development.
Tax consultants
According to Mrs.
Omoigui-Okauru, the involvement of tax consultants in tax collection is
illegal, as it provides avenue for the promotion of corruption as well
as a subversion of the activities of tax officers nationwide.
“I am completely
opposed to the use of tax consultants while tax officers who are paid
with tax payers’ money are there,” the FIRS boss said recently,
pointing out, however, that the use of consultants should be restricted
to capacity building activities and the generation of proactive
policies to improve internally generated revenue.
For the RMAFC, Mr.
Naiyeju said it was important that it lends greater weight and
attention to its revenue mobilisation role and responsibilities, rather
than see itself merely as one to prescribe the formula for the
allocation of revenues to the three tiers of government as well as
agency to determine salaries and remuneration for political office
holders.
He insisted that
the commission must re-address its fundamental functions and power
towards boosting revenue mobilisation in the country, by focusing more
attention on how the operations of non-oil revenue agencies could be
improved.
“The commission
should continue to undertake meaningful studies and researches in the
areas of operational efficiency and modernisation efforts for the major
revenue agencies like the Nigerian National Petroleum Corporation
(NNPC), FIRS, and Nigeria Customs Service (NCS), to boost their revenue
contributions to the Federation Account. The reports of such studies
and researches would enhance the commission’s advice to Mr. President,”
he noted.
