The Chairman, Ondo State Internal Revenue Service (ODIRS), Mr. Tolu Adegbie spoke with Saheed Ibrahim and Samuel Edu on the success story of the tax office in year 2021 as well as the projections for the 2022 fiscal year.
Excerpts:
Can we have an overview of the activities of the ODIRS in the 2021 fiscal year?
Last year 2021 fiscal year, you will recall that there was COVID, there was lockdown in 2020 and because of that, it affected a lot of businesses. You know taxation is based on the incomes of people and the only one that is fixed is the PAYE, but the formal sector, the direct assessment all of that are based on the income people earn.
Because we are just coming out of COVID and we know that all the businesses were closed in 2020 due to the lockdown. They were supposed to pay tax in 2021 based on their income of 2020. So, there was a lot of headwind going into the air.
The Ministry of Economic Planning still fixed the budget at about 28.8 billion and that was for 2021. So as we started the year, we had to come up with all kinds of ingenious ways to meet the budget and at the end of the year, we ended up with an achievement of 30.8billion, which is the highest in the history of Ondo state. The highest in the past was in 2019, when we got some windfall from government, we were able to achieve 30.1 billion then. It was an extraordinary year. Then we dropped in 2020 because of the lock down but in 2021, we came back to N30.8 billion.
How were you able to achieve this?
We rolled up our sleeves. We went to work, look at all the various areas, we looked at the withholding tax, we have not been doing much withholding tax and we face withholding tax -from dividends, from bank deposits, fast moving consumer goods, from commission and all of that and then also we did audit.
Since I came here in 2018, we have not conducted any large scale audit of companies in Ondo state and so last year, we decided as one of our strategies to conduct an audit for the first time and so that audit that we conducted on companies operating in Ondo state yielded a lot of results. So that is why our PAYE grew significantly. One other area that we grew significantly that I also mentioned in December is in the area of Okada and taxi tickets.
We started selling the tickets to taxis and buses last year. It was also a new initiative. The NURTW gave us some issues but with their proscription, we moved in and we started selling. We made quite a lot of money from that. Between Okada, taxis and the buses last year, we achieved a figure we have never achieved before. We did almost one billion.
Before now, the best we have done is about N450million to N500 million but last year, we doubled from that area. The same thing we did withholding tax that I mentioned earlier. We usually do N750 million but last year we did almost N1.2billion. You know we had some new areas that we focused on and we were lucky that those areas yielded results and that is why we have been able to achieve the figure we have achieved last year.
What will be your performance rating based on your achievements in 2021 ?
Well, in terms of percentage achievement, I think we achieved 108%. We were given a budget of N28 billion but we achieved N30.8 billion. In terms of percentage, I think we achieved 100%. Funny for us since we came, we meet our targets 100%. Whatever we get, we somehow manage to meet it. Last year looked daunting and difficult. In the middle of the year, it was tough. We were moving from budget of N24 billion to N28 billion post-COVID. But we rolled up our sleeves, had our strategy session, which we will do again very soon, and we put in place all these things and we looked at various areas. Remember also Land Use Charge. The highest we had done before was N180 million to N200 million but last year we did about N250 million because we went on enforcement, we did a lot of advocacy; we forced people to come and all of that. We did so much.
Also last year, you will discover that in terms of road taxes, I went on air to talk about how people do not have driver license. Motorists do not have driver license and they are not renewing their vehicle particulars. We went all out in every revenue area, even with the MDAs. The MDAs had no Commissioners, so we took advantage of that. We took over the revenue architectures. A good example is the Ministry of Agric. They had not done more than 50-60, 70, N80million before. Last year, they crossed N100 million. Look at Ministry of Natural Resources; they did so well last year. The maximum they had ever made from fishing activities was in 2018 when they did N125 million. Since then, they have been doing about 80 to N90 million. Last year, they performed over N200 million. It has never happened before. So because of our desperation last year and looking at the target, we went out in every area in everything – education, agric, natural resources and even pools betting.
What is the estimate of people we have within Ondo state tax net currently?
If you look at the number of payees from Federal MDAs, state government and other sources, right now we are close to about 700,000 people that are paying taxes. The artisans, the Okada riders, taxis and all that have come in. When you look at the numbers, we have about 700, 000. When I came, the figure was about 100, 150,000 there about. In my second year, we had a figure of about 200,000 + but by now, we are keeping the data and I think we have about 700,000 people thereabout.
What are your plans and projection for the year 2022?
For the year 2022, we are given a target of N30 billion or to make it a round figure, N31 billion and then again a target seems very close to what we did in 2021 but it is not that straight forward. Let me give you an example. Some of the strategies we used last year can no longer work this year again. For example, the tax audit that we did. Last year we did tax audit for three years and all the money we got was an accumulation of three years money that we got in one year. Even if you do a tax audit now, it will only be for one year. So, we explained all of these to the Ministry of Economic Planning.
Let me also state that the figure of N31 billion that we are given is the highest figure we were given in term of revenue budget in the history of Ondo state. So, again how we are going to do it this year, we will find out. We will roll up our sleeves, run our strategy session, which we are going to run this weekend, we talk to one another and hit the streets.
We have our backbone supporting us. With the various schemes that are coming up, we expect that from the taxi people, there should be some form of significant increase. We expect that the HOCOS scheme will also give us some money, apart from it benefits for the good people of Ondo state.
Do you think the target you are given is achievable?
I am an incurable optimist. I believe somehow, will we find a way. As we speak today, I have no idea but I know by the end of our strategic section, when all our Directors come with various ideas, we collate and we will have a working document and by the end of the year, we check our records.
I believe that with God on our side, with Mr. Governor firmly behind us and the people’s support, with the people of Ondo state behind us because it is very important that we believe in what we are doing and we believe in equity and fairness.
I believe with God of our side, Mr. Governor firmly behind us because he is the number one revenue officer in the state. He comes up with lot of ideas, challenges us and asks questions, directs and he supports us. With his continuous support and the people of Ondo state and not forgetting the State House of Assembly. The State House of Assembly has been doing wonderfully well. We have a lot of laws for the MDAs and they have been passing those laws, rate adjustment, and taxes adjustment. They have been doing that. And of course, the Judiciary: we have been given a revenue court. So, all the people that do not pay for land use we are taking them to court. It is easy for us. So, with all these supports and commitment of ODIRS management and staff, I think the target is achievable.
We had about 80% commercial drivers and 64% private vehicle owners without driver’s license. Has there been any improvement in view of various enforcement activities we had in the state?
Absolutely! I do not know the percentages because it is still early in the year. But if we go by the revenue that we generated, there has been significant increase. I cannot remember the particular figures now but I know there was significant increase in the volume in terms of revenue we generated from road taxes. I think there is an increase of about 35% in terms of roads taxes.
Are there any form of incentives for both formal and the informal sector as a form of encouragement to pay taxes as when due?
Last year, we had incentives for selected group of people affected by COVID-19. We had a 30% reduction in terms of direct assessment bills and taxes for schools. You remember in 2020, the schools were closed. So students were not coming. So, if students were not coming, where were they expected to get money from? The hotels; we gave them incentives in terms of pay what you paid the previous year because they were affected as well.
But there is no lock down anymore. So, there are no other incentives we are giving to anybody according to the tax law. Everything we do here is based on what the tax law says.So we are back to square one. We are back to normal life now. There are no additional incentives that we are envisaging.
However, you will recall that we have our standard;, what we call community impact project that we do for our people that pay Land use Charge. We grade roads, we put up signboards in some areas and many other things we do. Those ones will continue.
The judiciary: based on the support and all that and based on the revenue they also generated, we built toilet for them. We have the toilet for the lawyers and if you go to the State High Court, you will 2 brand new toilets we are about to dedicate it. Those ones will continue in terms of our community impact projects and CSR.
We did something last year because of the quantum amount of money we made from the Okada people. We decided give back to them. We did for three Senatorial districts. We give out generators and we also gave them gas cookers. Honestly, the reaction of the Okada riders was so unprecedented. This year, we are going to repeat it.
In addition to that, we are doing registration with the team of the SSA to Mr. Governor on Special Duties. We want to register all of them and with that registration, we are going to issue tax clearance certificate for them. So they can use it for whatever they want to use it for. But we need to do that registration and get their details so that in December, when they come with their receipts for the program, we can take their names and issue tax clearance certificate to them.
Also, our strategy continues in terms of efficiency of services. That is the bedrock of what we do. People come here and they do not see a lot of stories. We make it as convenient as possible for people to pay. People write us email from abroad that they want to do C of O. They send their documents, we process them and people are comfortable with our tight security. You can see what we did with HOCOS.
We decided to go and build, to renovate two buildings. So, you do not need to go and see one Commissioner or anyone. We have the two buildings, well-staffed and equipped just to make it convenient for people.
What brought about HOCOS Initiative?
The scheme is a brainchild of Mr. Governor. Sometimes in December, he called me and I said ‘Tolu, I want to do home ownership scheme. I want to do massive C of O, making it easy for the people of Ondo state to get their C of O and we should go to Oyo state and find out what they are doing there. So, I said no problem.
We spoke to the Commissioner for Lands and he said they had also been trying to do it some years before but there were issues. He gave me his PS and with pout team, we did our research and put the papers together and here we are. So, this HOCOS project is the brainchild of Mr. Governor. I cannot take credit for it. Nobody can take credit for it. This is purely the idea of our Dear Governor Rotimi Odunayo Akeredolu, SAN, Dr.
What are the benefits of the HOCOS project to the people of Ondo state?
There are lots of benefits in it. HOCOS gives you the opportunity to have your C of O which is the needed document for your property that confirms you as the owner of the property. If people now want to give out this property, there will not be any issue, you can easily say this house is going to this particular child and that is the end of story.
But once you do not have these documents or the C of O, by the time you want to sell it, it cannot get the premium price because whoever you want sell it to, will now have to do two C of Os.There will be one for the father (real owner) and another for the transfer before he will now start his own to transfer to his children in fact, that makes it three.
And then the cost of C of O before now, the Commissioner for Land said it usually takes a while to process C of O because people go to different kinds of agents to help them and they can spend up to one million naira and about a year because they do not believe they can come directly to the government, if they come directly, may be between three to four months, it will be ready. In terms of monetary cost, they will have a debt tax clearance, which if you are not under the PAYE, you pay N100, 000.You get new user approval, which will cost about N50, 000 or so.You do survey of N120, 000.You will now pay for the cost of the C of O itself depending on the area the property is located whether Alagbaka, Ijapo, Oda town or Igoba; they will now charge you.
Roughly it cost between N600, 000 and N1, 500,000 to get C of O.So,we have the time cost and monetary cost.Government has now combined the two costs. Time is 60days, monetary cost including the survey, building plan approval, N150,000 if it is a bungalow. If it is a duplex, I think it is about N200, 000.So,how good can it get? Irrespective of whether it is Alagbaka or Igoba, it’s a flat rate; everybody pays the same amount.
Who or which property is exempted from HOCOS?
Those people, who have bought lands under litigation, are exempted and they cannot come under HOCOS. Once you have a case in court, you cannot come under HOCOS. We have some of them writing to us asking government to step in but it is not the responsibility of government to step in when a case is in court between two family members.
What usually happens is one family member will sell land to someone; another member of the family will come and say he is the owner of the land. So these are the kinds of issues HOCOS will resolve. If the original owner has gotten a C of O, there will not be any dispute. So, if there is C of O from the onset, there will not be any issue.
All you just need to do is to bring the C of O and you know nobody can argue the C of O. The original copy is with the Ministry of Lands. When we get to the Ministry of Lands, they will see whose name is on it and that settles it.
It makes the transfer of properties easier and of course also helps in securing loan easily. Instead of all these loans that people take from microfinance banks and they charge you 60% interest rate, because they said it’s 5% interest every month, I do not know the kind of business you will be doing to get 5% monthly.
So, they will now be running here and there. With your C of O, you go to bank and they charge 25% maximum, when you divide 25% by 12, it gives you about less than 2.5%. So instead of paying 60% on bank loan is better to get it lesser. Because once you have a proper C of O, you can easily secure loan in bank and that is what they are looking for.
So that is one of the advantages of the HOCOS program and the convenience. Before now, if you want to get C of O, and then if you want to have a building on it, you need to get a building plan approval. Building plan approval is done by the Ministry of Physical Planning, you need to go and see them and they will have to visit the site and you will pay. C of O is issued by the Ministry of Land, you will see the PS, write a letter and follow it up, they will follow you there, you will have to do survey from outside and you will bring it if they say the survey you have done is not correct you will have to do it again and one survey is N120, 000 and by the time you do another survey, you have spent N240, 000 already just by going from one ministry to the other.
Now, the whole of HOCOS program is in one building.Everything you are doing is in one building, and you are seeing our staff, you don’t need to see any PS, you do not need to see any commissioner, you don’t need to see any director, you do not need to know anybody. This is something that Mr.Governor has put down to make it convenient for everyone.
Does the scheme allow payment by installment or the N150, 000 must be paid at once?
Well, the payment plan is at the back of the pamphlet .It is not N150, 000 for everything. We have N150,000 for a bungalow, N175,000 for a duplex which means we have just one floor on it, and there are some buildings that are three floors building; those ones are N225, 000. Now there are payment plans, you can pay in one installment, two installments or three installments; the same for every type of buildings. So, we actually make it convenient for people that you can pay in different installments.
This is very important and I want you to emphasise it, THIS SCHEME IS FOR A SHORT PERIOD OF TIME, DO NOT SAY BECAUSE I DON’T HAVE N150, 000, THEN YOU WILL NOT KEY IN. GO AND BUY THE FORM, COLLECT AND REGISTER YOUR SCRATCH CARD TO SHOW THAT YOU HAVE PURCHASED THE FORM. IF YOU WANT TO WAIT UNTIL YOU HAVE COLLECTED ALL YOUR DOCUMENTS, YOU CAN ACTUALLY WAIT UNTIL YOU GATHER YOUR DOCUMENTS TOGETHER AND HAVE SOME MONEY MAYBE FOR THE FIRST INSTALLMENT TO COME AND DROP IT.
THAT PAYMENT MAY STRETCH AFTER THE 90 DAYS INITIAL PERIOD BUT AT LEAST YOU HAVE KEY IN BY BUYING THE FORM AND THE SCRATCH CARD AND REGISTERING YOUR DETAILS WITH US.
BY THE TIME THE SCHEME FINISHES, IF YOU HAVE NOT BOUGHT SCRATCH CARD, OR REGISTERED YOUR INTENTION, THEN YOU CAN NO LONGER PARTICIPATE BECAUSE THE SCRATCH WILL NO LONGER BE AVAILABLE FOR YOU TO BUY.
If the scheme expires and no more scratch card to buy, that is the end, but if you have bought, you have keyed in and how much is the scratch card? It’s just N6, 000.Are we saying N6, 000 is too much to join the scheme? So my advice is that everybody should go and buy the form, buy the scratch card, phone your number in and register.
We have more than enough scratch cards to go round during this scheme, in fact, starting from first of February; we are sending the scratch cards to all our offices in the 18 local government areas. So, it makes it easier for people to purchase the scratch card but you have to come down to Akure for the submission of your documents because we do not want to collect anybody’s original documents and be traveling up and down, we will not be responsible for that when you have your money, but the scratch card will be sent to all the 18 LGAs, so you can buy with N6,000 once you get the scratch card and the form, phone it in with your details and register.
What is the time frame for the scheme?
The scheme was launched on January 4, is that the starting date for the 90days?
That is the starting date for the 90days
Can someone apply by proxy, those in other states or abroad but have property in Ondo state?
Of course! You will send somebody to come and obtain it for you just the way people abroad are already processing now, your brother, your sister, there must be somebody on ground, who will do the running for you. So send the money and give us your details, not the details of the person you sent. It is very easy.
What is the mode of application, will there be biometric data capturing, is it physical on it can also be done online?
It is the same way we process C of O now we are going to process it. Remember, the whole idea of you phoning in your number and your name is just for you to register that you have keyed into the program, if you do not bring your documents, we cannot do anything. If do not bring all your papers, your survey, your sketch and picture of the property, we cannot do anything because we still need to go and visit the property. We still have to do charting, we still have to do publication we still have to do all of that. All the processes that is being followed under the current C of O administration will still be followed just that there is a reduction in time so nothing has changed.
Please let me also add that the 60days that is written on the form and everything start counting from when you submit your documents and they say the documents are accepted.
