In recent years, dwindling oil revenues to the Federal Government has meant lower Federal allocated revenues to the States. Governor Udom Emmanuel’s earnest desire to boost internal revenue to fund his social contract with the people of Akwa Ibom State in the face of paucity of revenue from federal allocation is paying-off as evidenced by a significant improvement in IGR at end of the first quarter of 2018.
Being a man of vision, His Excellency, Governor Udom Emmanuel strengthened the revenue generation structure of Akwa Ibom State in accordance with international best standards, so as to meet up with the fiscal demands of his administration.
In order to fund its fiscal plan and deliver on its commitment to the citizens, the Governor embarked on massive transformation of the Internal Revenue Service of Akwa Ibom State by sending an Executive Bill on Akwa Ibom State Revenue Administration law to the Akwa Ibom State House of Assembly within the first year of his administration. The Bill was passed into law by the Akwa Ibom State House of Assembly and accented to by the Governor in June 2016. The law among other things granted full autonomy to Akwa Ibom State Internal Revenue Service. The Governor followed up with the inauguration of a pioneer Board in April 2017 to interpret the vision and deliver on the goals of the law.
The Board comprises Mr. Okon Okon, Elder Nse Atang, Dr. (Hon.) Ekere Afia, Mr. Leo Umana as members and Mrs Ikemesit Ekpro as the Secretary. The 5-man Board is led by Mr. Okon Okon as the Executive Chairman. Mr Okon, a Banker of repute, a member of Chartered Institute of Taxation and Chartered Institute of Bankers of Nigeria, a fellow of the Institute of Credit Administration (ICA), holds Bachelor Degree (Second Class Upper) and Master Degree in Economics from the University of Uyo and Lagos, respectively. Okon also holds an MBA from the University of Lagos. His appointment as the pioneer Executive Chairman of the autonomous Akwa Ibom State Internal Revenue Service has proven to be a major boost to the State’s revenue generation apparatus.
His profile, including over 28 years in banking with extensive local and foreign training in business leadership and administration, is widely adjudged as a square peg in a square hole capable of translating and delivering on Governor Udom’s vision of making Akwa Ibom State an IGR dependent State.
The Board, which comprises professionals, seasoned administrators and public servants have channeled their combined wealth of experience in business leadership, administration, accounting and public service towards Governor Udom Emmanuel’s vision to revitalize the economy of the State, notwithstanding the dwindling allocation from the Federal Government. In doing this, the Board has repositioned the Akwa Ibom State Internal Revenue Service (AKIRS) to make optimum use of available material and human resources to efficiently assess, collect and account for revenue and taxes due to Akwa Ibom State Government.
Since the inauguration of the new Board, the State’s IGR has been trending upward. With the launch of a transformation agenda christened Revenue Institution Transformation Agenda (REVITA) by the new Board in January, 2018 the total IGR for Q1, 2018 recorded more than 50% growth above the corresponding period of 2017 which stood at about N4.5bn. The robust transformation agenda emphasizes on a paradigm shift in business approach; from the conventional bureaucratic model to an enterprise model. Efforts at automation and extensive tax education have been on the increase. Also, while the tax net has been widened, leakages are being blocked. Generally, the organizational culture has been redefined by the creation of a new Corporate Philosophy, Vision Statement, Mission Statement and Core Values.
The Executive Chairman explained “Current economic realities have made it imperative to significantly boost the IGR of the State and avoid leakages in an effort at building a robust fiscal structure that can support the budget of the State since crude oil prices and output have not recovered from the crash of late 2014. Nigerian output is only recently struggling for a rebound. Combined effect of these has been the significant fall in Federal revenue allocation to States thus triggering the urgent need to go back to the basics of public financing which is taxation. For His Excellency, Governor Udom Emmanuel to continue his on-going superlative performance, he needs finances from both the IGR of the State and Federal allocations. When we took charge in the second quarter of 2017, the IGR of the State was hovering around ₦700million per month. Road taxes, for instance, was about ₦10million monthly. By August 2017 when automation was introduced, revenue from road taxes doubled within 3 months. Encouraged by this, we have concluded plans to deploy appropriate automation in all areas and processes of our revenue collection.”
The DAKKADA philosophy and the industrialization drive of His Excellency, Governor Udom Emmanuel have helped the expansion of the tax net as new industries and enterprises have sprung up in the State. Growth in the number of small businesses have generated corresponding employments and generally increased our tax database.
To further block revenue leakages, His Excellency, Governor Udom Emmanuel has ordered that all tax payments be made directly into State’s IGR accounts; cash collection is now prohibited in the Internal Revenue Service. To this effect, tax payers are warned to desist from making any cash payments to any individual or authority within the State. This has reaffirmed the integrity of the administration and its efforts to ensure that tax payers’ monies go into government coffers and are used for the right purposes only.
Other achievements of the Board in its first one year include introduction of e-payment channels and stoppage of payment by cash, growth in taxpayers database, capacity building in terms of training and human capital development, successful tax audits and investigations, work-tour of all the 64 field tax offices for a first-hand appreciation of situation at the Out-Stations, improvement in work tools and physical environments, staff welfare scheme, Monthly Performance Review geared towards stimulating efficiency and higher productivity.
Also, in accordance with extant laws, AKIRS has recently inaugurated the State Joint Tax Committee to engender collaboration among tax authorities and harmonization of taxes in State. The committee comprises all Chairmen of the 31 Local Government Councils and MDAs. This will ultimately eliminate the problem of multiple taxation and boost taxpayers’ confidence and convenience.
In his words “Multiple taxation is an issue that leaves taxpayers complaining and feeling exploited by Government. To eliminate that feeling and ensure fairness, transparency and accountability, we inaugurated the State Joint Revenue Committee to ensure effective harmonization of tax and revenue collection. We also tried as much as possible in our capacity to handle reported cases of duplication of taxes because AKIRS is the Agency charged with the collection of taxes and revenue for the State. Furthermore, we collaborate with Ministries that have revenue generation and collection responsibilities to ensure a friendly tax environment for our taxpayers”.
Commenting on the benefit of the Voluntary Assets and Income Declaration Scheme (VAIDS) to the State Internal Revenue Service, he explained that VAIDS was launched by the Federal Government as tax amnesty for defaulters across the three tiers of tax jurisdictions namely Federal, States, and Local Governments. We strongly believe it will help increase the level of tax compliance and payment which no doubt will benefit all State Governments. The turnout thus far has not been quite encouraging in Akwa Ibom State but with the extension of expiration period to June 30, 2018 response is expected to improve appreciably. Since the declaration of tax Thursday by the Vice president during the launch of VAIDS in July last year, we have taken advantage of the Tax Thursdays to increase public awareness and sensitization on tax payment culture”.
He also narrated that “fortunately for us in Akwa Ibom State, we have robust evidence for taxpayers’ money. You know Akwa Ibom State has become the fastest growing State in Nigeria powered by excellent leadership and administrative skills of His Excellency, the Governor. You can feel, see and touch the numerous physical infrastructure and live-touching projects of Governor Udom’s administration. These represent great value for taxpayers’ money. If you calculate the monetary value of projects that have been executed within the three years of Governor Udom Emmanuel’s administration, it is more than the Federal Government allocation and the State’s IGR combined. Certainly, the Governor has leveraged his wealth of experience in finance management and wide global network. He has turned all the 3 senatorial districts of the State into a beehive of activities and projects; by embarking on massive renovation and upgrading of hospitals, huge investment in agrobusiness and expansion of road network.
Also, salaries are paid promptly and pensions too. New schools and renovation of old ones as well as payment of WAEC fees for SS3 students resident in the state irrespective of state of origin, and free education program are on-going. I am saying this as a matter of fact because you can verify them. This is a manifestation of taxpayers’ money in action.”
On defaulters, he continued, “We have revenue courts in the three senatorial districts of the state which are awashed with cases and tax defaulters are being prosecuted. The response has been effective because many taxpayers have voluntarily come forward to clear the backlog of tax liabilities. We are not relenting because we have not gotten to that level in Nigeria where voluntary tax compliance should be.”
On his projection for AKIRS, he said, “this Board would like to leave behind a fully automated service with the deployment of a robust tax administration technology and a very efficient system that will guarantee continuous growth in IGR and excellent service to taxpayers. We seek to have a well trained professional structure that can stand the test of time and compete favourably with other tax authorities in Nigeria and possibly stand out as the best. We also look forward to having our IGR contribute up to 25 per cent of the budget of the State in the next couple of years.
On a final note, he thanked taxpayers in the State who have been honouring their civic obligation by paying their tax appropriately and as when due and urge tax defaulters to come forward and pay their taxes since tax payment is for the public good.