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Far reaching leap in Ondo’s IGR, targets N35b from 10b

By Kayode Adegbehingbe
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One of the notable achievements of the Arakunrin Oluwarotimi Akeredolu-led Ondo State government is the near doubling of the IGR from N10billion in 2017 to N18billion in 2018, being the highest in the history of the state.

It is a great leap and indicative of a transformation in the tax culture of the people of the Sunshine state.

The financial health of the government everywhere in the world is directly linked with the volume of its internally generated revenue.

It is because of this that Lagos State is regarded as one of the most financially healthy states in the country, with the monthly IGR of N34billion as at last year, and with capacity to fund a substantial part of its budget provisions, as it is clear that state government’s capacity to deliver on its mandate is directly proportional to the strength of its internally generated revenue.

That Ondo State made a major leap in its IGR from N10b to N18b even in the midst of biting economic challenges and an economy under general malaise, just coming out of recession, is  no mean a feat.

It has been able to make such progress because of the political will backing the activity of the Board of Internal Revenue, expansion of the tax net, blocking loopholes and the digitalisation of the processes.

Payment of taxes is a form of partnership between the government and the people for mutually benefiting ends.

To indicate the seriousness that the Ondo State government is approaching the issue of internally generated revenue, recently, five civil servants, who have now been suspended from their different positions, with another accomplice, were arrested by the police for allegedly making away with N200million in tax fraud. Monies that are supposed to go to government coffers allegedly ended in private hands.

That move would send a message throughout the system and make everyone to tighten their seat belt that it is no longer business as usual.

Whatever those people have allegedly been doing to ensure that their malfeasance remain under the radar for the length of time it lasted, did not work this time around.

And this should be credited to the vigilance and painstaking investigation of the government to remove the clothes from the masquerades licking up the state’s resources.

The arrests represent the right step in the right direction. Civil servants have over the years been regarded in some quarters as the harbingers of corruption so there is need to beam more searchlight in that direction.

Efforts need to be increased to ensure that others who have devised means to fraudulently enrich themselves at the expense of us all, are fished out from the system, made to face the music and to cough out their ill gotten gains, to serve as a deterrent to others.

This is because if such a trend is allowed to continue, achieving anything worthwhile in the increase of IGR in the state will continue to be a mirage.

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At Ondo State House of Assembly, during a  public hearing last year on a new law to centralise taxation in Ondo State, the chairman of the State Board of internal revenue, Mr Tolu Adegbie revealed how the board has been able to increase the N10b to N18b leap.

He said: “We blocked a lot of loopholes, we sanitised the Board of Internal Revenue, introduced automation and did a lot of stakeholder engagements. We told the people not to give their money to individuals, tax officials but go to the banks and make payment.”

Visitors to the various banks in the state capital would have witnessed an increase in tax-related activities, as the people key into the new tax regime, paying their dues into the banks and thereafter collecting receipts from the office of the Board of Internal Revenue.

The chairman at the public hearing explained that a lot of money being collected from market women and men and other tax payers by some agents and officials including local governments cannot be accounted for, asserting that if the central authority takes the control of the revenue collection, all the loopholes will be blocked and there will be sanity in the system.

According to Adegbie, great improvement would be witnessed with the full centralisation of tax collection activities in the state, which would further block loopholes at the local government level, with the promise that that tier of the government would not be short-changed in the new arrangement.

In addition, the era where some civil servants feed fat on the accruable tax largesse would further be a thing of the past, and with that, the IGR volume would increase.

Expanding the tax base has been one of the advances is the Ondo State government has made. One way that has been expressed is through the implementation of the new Land Use Charge.

The chairman said: “tenement rate used to be collected by the local government for all houses in the state. But a law was passed in 2014 cancelling that. The Land Use Charge Law.

“When I came into office, I realised that the law has not been followed. You still have local government collecting tenement rate, members of the Board also collecting Land Use charge.”

That may be regarded as a form of double taxation, and has created many loopholes in the system with resources leaking from all sides because of the opaque nature of the collection process hitherto employed.

The key word in the tax programme of the Ondo State government is “harmonisation” where all tax collection in the state are put under one roof for greater efficiency, effectiveness and accountability.

To ensure the general acceptability of the implementation of the land use charge law, stakeholders meeting have been held to have everyone on board. The board has done a good job to go round some towns to sensitise the people on the new taxation regime in the state. And there is need for continuous sensitisation to enhance full engagement.

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And to give a soft start for the programmes, amnesty was declared from 2014, when the law was supposed to have kicked off, to 2016, and payment was demanded for years 2017 and 2018.

After hitting N18billion last year, the board chairman has said the target for 2019 is N35b.

According to information available from the state website, the Mr Adegbie said that he is committed to ensuring that the same strategy used last year for the increase from N10b to N18b is continued to realise the N35b target, inclusive of the Land Use Charge.

Mr Adegbie said concerning the land use charge, “by the time we go to all the local governments, there will be great improvements.

“We have been collecting from only three local governments of Ondo Owo and Akure. We have not even finished covering them and the money accrued will be shared with the local government areas.”

He said that rather than increase tax burden, the focus is to increase the number of people paying taxes. He charge the people on the proper documentation of their payment through the keeping of receipts which bears Ondo State logo. He gave special recognition to the State Governor for the full weight he has applied to put tax collection on a good footing.

The Governor did not say they need to do more with one hand, but because of political expediency, subvert the board with the the other hand.

”When you talk of our achievements last year, it could not have been possible without Mr Governors political will to enforce taxation,” Adegbie stated.

The land use charge law, according to Adegbie, provides for the collapse of the tenement rate and the other land use charges that are paid periodically into one.

Breaking it down, he said in an interview, “The federal law says the local government should collect the tenement rate and the state government collect the Land Charge. So you have the people from the state and local government coming to collect those rates.

“The law has classified houses into three areas. We call them Base Value Zones.They are the low income area, medium income area, and the urban/high value zone or the premium areas.

“Those in low income area are to pay N1000 yearly, medium is two thousand and five thousand for urban high value zones. The rates arrived at has not generated any complaints from any quarter.

“We have what we call commercial rental per apartment. For this area, they will pay seven thousand naira per commercial rental per apartment.”

Speaking on the collection modality, he said: “The first thing you will get is the notice of visit for the Ondo State Land Use Enumeration Exercise. The notice will say that we are coming to enumerate.”

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For the purpose of ease of enumeration, he said: “for the payment purpose, instead of us going to the banks we have added quickteller run by interswitch as a payment option. So you can go to any ATM, go to quickteller and pay. You do not need to go and queue in the bank.

“Now we are working with some banks. So if you have the mobile app of GTB, Zenith, Wema, Ecobank, FCMB, just go to the mobile app, go to bills payments, where you normally pay for DSTV or government or electricity bill, you will see the LUC just click to pay.”

In the 2012 report by Price Water House Coopers’ on  “ease of Paying Taxes Ranking,” Nigeria ranked 138 out of 183 economies that have relative ease in tax payment, and this corresponds to the low rate of tax remittance, which is what the state government has made efforts to rectify with the new move.

The board should be commended for such inventiveness and innovative thinking  to incorporate the digital solution to make tax payment easy.

Ondo State boasts of about 4million inhabitants, bringing all taxable adults on board in a sustainable manner should be the long term goal, beyond merely having a monetary target of N35b.

Speaking further, he said that “All the people in Lagos or anywhere who have houses in Ondo State, all they need to do is just tell someone to help check their bill number and with it they go to the app wherever they are and pay from there or send their assistants to any ATM to pay.

“I encourage everyone to participate and cooperate with the land use officers. If you look to the Land Use Act, it says in section 21 Ondo State LUC 2014 that any person who commits any of these offences shall be liable to a fine of not less than N500000 only, in the case of an individual, and two hundred thousand naira, in case of a corporate body or get a term imprisonment for a period of three months or both.

“And the offences are as follows: a} if you refuse to comply with any provision of this law when required to do so by the property identification officer or collector or assessor, b) prevent, hinder or obstruct any property identification officer or an assessor in the course of his lawful duty or c) remove from or damage or destroy a property identification plaque on any property or building.

“Just imagine that the money we want to collect is maximum of ten of twenty thousand, if you now obstruct you will pay fifty thousand naira or/and go to prison. It is good to cooperate.”

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Far reaching leap in Ondo’s IGR, targets N35b from 10b

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