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Ondo may no longer wait for federation allocation to pay workers’ salary

Ondo may no longer wait for federation allocation to pay workers’ salary

Mr Tolu Adegbie is the Chairman of Ondo State Internal Revenue Service (OSIRS). In this interview with line Editors, he spoke on the crucial need for a sustainable Internally Generated Revenue (IGR) and the agency’s efforts at checkmating revenue diversion among several other issues.


Since you assumed office what remarkable achievements have you recorded?

Thank you very much, when I was appointed by Mr Governor, I resumed  office on 15th of January 2018, Like any  other job, if you have to do your research, you have to look at people who are doing well, what are they doing and how are they doing it .

Most of the problems we have in Nigeria is implementation, there are lots of good policies out there, but they are not implemented properly, so we went out to do our research, we went to the fastest growing state at that time, it was Kwara state  in 2017, we saw what they were doing , we went to Lagos , what we went to do in Lagos, we went to do review of the transformation process when Mr Fowler took over in 2005. Then we came back to Ondo state . we wrote a position paper to chart  a way forward .  But  you see, if you want to reposition any of our organisations  or  institutions you must have a blueprint, a master plan that you are following.

Success will not fall on the laps ,there must be plan, well researched that you are following. We presented a document to Mr Governor and he approved at that is what we started to follow.

Before now, the budget of the state for the IGR is about N15B.

When I came in, they jacked up the budget to N23 billion, the highest they ever gave the Board of Internal Revenue to run. So I must justify why the Governor said I should be there, but because we have a plan, well researched and documented  we executed our plan and we were  able to do N24 .8billion.

And so, we met the budget that was given to us in the Ondo state IGR  for 2018.

And then, after that, all of a sudden, we started hearing reports that we are number one in terms  of roads, that we are number this ,we moved from 20 to 19  in terms of quantum, we are not looking at anything national we are only focused on what is on the budget that the State House of Sssembly passed for IGR to fund the state expenditure, so that is all we are looking at, we thank God and Mr Governor for the support and all the staff of the BIR and all the citizens of the state that cooperated with us to achieve  the budget.

Reports says the state has migrated from N700 million to N1.5 billion monthly IGR. Recently the governor said the IGR of the state is still low what are your aspirations ?

Look at these numbers, six revenue retaining agencies are generating IGR more than 70 MDAs in the state. What that means, despite these figures that we claim  we have, where  is the money being generated by other MDAs. So there is something fishy going on. We have not been able to put our hands into it , but we are putting a structure in place , like I told you I’m very strong on research , so we are putting our house in order now, we just recruited some graduates .

We are doing a lot of restructuring now, by the end of that exercise, once we are ready we will go after all the MDAs ,because six revenue retaining agencies cannot be generating more money than all other agencies and ministries in the state .

Who are the revenue retaining agencies, the universities and the hospitals, more so when we gave Mr Governor that report, of course, he was not happy, that was why he came up that we are going to prosecute people. You know we caught some people  last year .

 And so, that is our thought, but all he has said is based on the report we had presented to him. Now in terms of average you may be wondering that we have done N1.5b  after all, last year, we generated N24 billion, that is  N2 billion in the average, now what happens in taxation is this ,just like I told you the strategy we are pursuing , we have the strategy of the regular tax that people pay  and we have money that is being owed Ondo State by a lot of people, oil companies and all that , so we call it recoveries, so on a regular basis, we move from N700 to N1.5b, but you know this  average changes on a monthly basis.

But we have what we call cumulative average, our cumulative average as at June now moved from N1.5b to N1.7b. So the figures are better than what we reported to Mr Governor last time, but we hope that it keeps going higher and higher, now it does not mean that we will not get some recovery at the end of the year.

Last year, we got some recovery, we got some in June, we got some in December, about N5.7 billion, now the implication is this, we are being prudent, people speaking for me and my team, we will not count on an extraordinary income that came as part of our regular average so let us have what we call Ogata ogoota which is N1.7b as at June  from N1.5b we reported to Mr Governor last. Now N1.7N, Ogata ogoota N1.7b is sure now so if you analyse that time, it will come to about 16 point something. but we have what we call recoveries, recoveries are money that has been owed to  the state. It is part of our strategy when came on board last year, I give an example of an oil company, big international oil company. It has terminal  oil well in Ondo State and has not paid tax in  the  past 10 year. Another one too has just one oil well, but has not paid tax to Ondo State in the past 20 years, so we went after all of them,so the one that has not paid tax for the past 10 years started paying, from them alone, we got over a billion naira. They are still owing us backlog which they said they will pay. I can review the figure but if that figure come, it will in bulk so our figure may  end up at N29b for the year but do you understand the difference?

One lump sum can come to jump up your figure to meet your budget, but there is still one we call the normal one ,the regular one, whether we like it or not, this one you are sure ,so that is what I meant by strategy we  pursued and the strategy to me a lot of people still come to me and say Tolu, there is leakage  here and there, taxation is a marathon not a sprint .

I didn’t collect it now because I don’t  have structure, I can collect it next year, but these people who are owing me bulk money all these big companies, they have finished  assessment of three banks, big banks in Nigeria, we  have international audit firm last week, we finished their assessment, they agreed they are owing Ondo state more than N1billion for the past ten years. So I told people, calm down for me, all these people wearing suit and  tie and who can actually afford to pay, I will go after them personally. That is why you see our officials doing their job and nobody is shouting in the street.

The recovery is there but at the  same time, we are growing our capacity for the regular tax , so Mr Governor is correct and everything he said is based on the information we provided , like I said, from 1.5 in May, we are now on N1.7b and we are still expecting more recovery in the course of the year .

As we speak, we are supposed to generate N29 billion, that is the budget for this year. They have moved my budget from N23billion to N29 billion again. I know the reward of hardwork is more work, but the Glory of God, as at June,  the budget for half year we have met it, by the Grace of God you have been supporting us  and with  the support of Mr Governor we will keep moving on.

As we are growing the regular monthly one, the Ogota ogota, owo alaru ape, as we are growing that one to N2billion N2 .5 billion to N3 billion, all the other outstandings we will also be chasing them to beat up the  figure until we get to a sustainable one because the number  that are sustainable is actually the monthly ones.

Any state that wants to have economic, development, they must focus on sustainability of their income, the growth in Lagos IGR have been sustainable over a long period, so that is our ultimate strategy , what we are doing in terms of recovery at our own short term , two years programme which we believe at the end of two years  we shall recover all the recovable but at the same time, we are building strong capacity and structure for the ones that will sustain the growth, now the monthly regular growth is something about N3billion to N4 billion on a monthly basis, in Lagos whether they come to work or not, their target is to hitN4billion in a month in about two years.

It is generally believed that civil servants are corrupt, how many of such cases have been detected?

 My first year in office last  year, we uncovered across the state,  about 20 to 25  cases. In most of the cases, the people paid back the money, let me give you an example, people came to us to day that they paid Land Use Charge to some people who came and said they are staff of the  Board of Internal Revenue and they paid money to them. When we were going round in August, we met them and they said they have paid, where is the government receipt  but we know the phone numbers of the persons who collected money from us , so we called the persons and told them you collected money and they said oga we are bringing it. I was just keeping it for them, so quickly they will come and bring the money .

Even the money they have collected in 2017, they quickly  brought the money, but we have some cartel that were uncovered the which I’m sure Hope newspaper published the news sometimes last year.

We broke that cartel and they were arrested, paraded in the media and were taken to court. The case is still in court.

By now, it has reduced drastically. I get feedback from the people and most of the feedbacks I get is that ‘all your people are behaving now, what is going on’, I give an example. The law in 2004. I cannot remember the section again which says, that if you do not pay your tax, BIR has the power to enter your house, shop and office and carry any item worth the value of the tax until you pay  the taxes and if you do not pay after 14days, they can sell that asset until you pay your tax. That is what gave the tax men the power to go into any shop and anywhere and carry people’s belongings but this law was changed in 2011 and you can no longer do that without a count order, but when I came in, it was not followed.

In terms of corruption you are talking about. I can tell you that relatively the Ondo state Internal Revenue Service people are clean.

How far have the state gone on the implementation of the LUC?

Land Use Charge law was passed in 2014, that law was also recognised in the federal rates and chatter properties rates and charges to be charged all over the federation for the first time in 2015, so at the time the law was passed in 2014, it was not recognised federally until 2015. Only states  like Lagos started it earlier, but the Federal Government adopted it in 2015 which also we are involved but not collecting till 2017. So, that law made its own provision clearly, that if you don’t pay just like every section of CITA every section of CITA has its fines and penalties. The one for Ondo State Land Use Charge also has its own fines and penalties. If they serve you a notice and if you remove the tag, they pasted on your house, the penalty is N100,000, if you assault a staff of BIR and we have evidence,  the penalty is one month in jail. The penalty is clear, because if our people are not protected by law, how can they be effective.

If you did not touch them and you did not remove your tag, but failed to pay, we have what we call 30days, it  is in the law. Wait for 30days after which we go ahead and seal. That is what the law say. It is our discretion to know when to come and seal and once we seal and you cut the seal it  is N250,000.

Meanwhile, how much are we charging? N5,000 . So,  is it not better to pay the N5,000 than to go through the hassles? Meanwhile, this law was made in 2014.

But nothing has happened to defaulters?.

There is a reason why nothing has happened. When we started, part of the strategies like I tell you earlier is that we said let do like a demo ,So we brought in about 40 people, put them in three local government areas , Akure South, Ondo and Owo to test run. So, it was these people who have been working, so when we saw the results from the  three local government from 40 people, averagely, before now since we started the law, they generated about maybe N10millon a year. I think the maximum was N11million  but in eight months, we generated N203million with 40people in three local governments, so we saw that it was working and that is why we now brought in people from all local government areas.

Taxation is not everything heavy handed, it has to have its own people orientation, we are going to do enforcement definitely and by the time we do enforcement, everybody will know that we have tried . The law is there, we are just waiting for the time to apply it.

Since the state commenced implementation of the law what form of feedback have you received from the public?.

Let me say that, we have gotten a lot of support from the public and most of  the support is coming based on what they said, that we make it convenient for them to pay. They bring the bill to their houses and  payment is easy , if you have paid your land use charge , you see that they brought the bill to your house and the process of payment is easy.

It is even faster than payment of other regular taxes. They give you a payment invoice, you give your mail they have to type and get it  correctly by the teller, you queue in the economic code and the ministry under which you are paying and the revenue head.

There are about four or five items, that is why when they go to the banks and the tellers are busy, on Land Use Charge,  you only key the eight digit numbers and all the information appears, click and collect the money.

Also with the payment with the old one. We intend to change it to something like that, so that tellers at the banks will find it easy to process those transactions . The average  time you have to process Land Use Charge is about 30 seconds. The average time to process regular tax transaction is about two minutes at the bank.

Reaction of the public has been  very encouraging. In most places, people are paying . We always have pockets of people who are not paying.

What about pensioners?

Thank you for the question. You know pensioners are exempted from paying personal income tax because, their pension income have been taxed when they were working. So now that they are pensioners, you cannot tax that income again, that is double taxation, but people came to have this impression that it is because of age. No, it is because their pension income has been taxed, while they were working and that money has been saved for them to spend in their later years. That is why we are not collecting tax from those income, but as long as your children are sending you money every month, gift is a taxable item.

If you are an old person living in a hundred million naira house in Ikoyi, built for you by your son, that house is taxable. However, sometimes they might say due to age, he will not pay tax at all.

Everyday now, we get letters from companies that want to do their payee. Last year, five companies came to us, every week, I get  letters from  companies offering themselves up for payment and to be part of the process.

You know before you do something on a big scale, you must first do something like a demo on a small scale to see whether it is workable. What we are doing with Land Use Charge is that we share the money to all the local governments according to the law. It was the first time in history that the state government will willingly come up with this.

The money we collected for eight months was shared, we took the cost of collection and distributed it accordingly, we tried that and it worked , so we are moving on. The state has not been collecting Radio and TV license ,it is the responsibility of the local governments, but we do not  go out to harass people, we developed a strategy for this. We sat down with the Chairmen and the Directors of Local Government  Administration in  the various local governments and we decided that it can be done like that of Lagos, how is it done? Anytime you come to pay for your car registration, we add five hundred naira to it. On your car registration, you will see that you have paid for your radio and TV license, for year 2019,the money is for the local governments but they have graciously agreed to give us the cost of collection because we are printing , there is a structure of collection, they will take 80 percent while we take 20 percent cost of collection.

This is a revenue they have never collected before, now the Chairmen of local governments  do not need to worry because from Land Use Charge, they will get money, from radio and TV license they will get money and we keep moving on. When we talk about Lagos, it is because of stability, every year you will be seeing progress. Last year, it was land use, this year, it is radio and TV license. That is the relationship between local governments and the state in terms of revenue. As long as you are a driver ,either commercial or private, you just pay seamlessly ,no stress.

Wouldn’t this be a burden on the tax payers?

No, let me put it like this, who are the people that come to renew their vehicle license? Remember our principle, we are focusing on people who can afford to pay, how many people have their own personal cars in Ondo State, how much is the cost they use to fuel their cars in a week? Can they fuel it with N500? We said people should pay N5,000  per year on land use, divide it by 12, it is N400, divide it by 4,that is N100 per  week, how much do we spend in a week on recharge card, not to talk of data? The point is that the money we are asking for is not too much.

Some people were saying that they have not felt government presence in their domains, what is the correlation of this land use charge with what people are saying ?

Very good question and I will tell you, there are two things that are certain in life, it is death and taxation. It is even in the bible, they said give unto Caesar what is Caesar’s and give unto God what is God’s. From the religious and legal perspectives ,taxation is taxation, no condition is attached. Now in real term, people have the right to demand from the government, it is their right after they have paid their taxes, but for people who refused to do what is required of them, it is not healthy for the system. If you do what is right, you can ask questions, and honestly in Ondo State, we have been blessed with the governor that we have now. It is not because I am working for him, it is what we can all see, that actually this money is being spent on what is right. Federal allocation is going down, yet projects are going on and to the best of my knowledge, I am not sure Ondo State has taken any loan from anywhere, so how is it being done, it is the ingenuity of the government, it is the taxes of people who have continued to cooperate with the government and this figures keep going up.

 Taxation should be a marathon as government development is a marathon. If you travel abroad, you will see that they keep developing, development does not stop. Even we have plans that tax collection will wrap up in one year or two and that is why government says eight years if the people agree to do the work to a level, I said earlier that people talk about Lagos, it is because of stability, they had the first sixteen years of continuous development where they had a particular blueprint. If you do not have that, it will not last because different people will come with different agenda, sustainability is the name of the game, so if we have a governor that is doing the work as it should be done, we should provide that sustainability to help the state to develop and equally enhance strong foundation so that when other governments come in, they will not be able to change what is on ground.  it cannot happen overnight.

For us, all the plans we have is what we call continuity impact project, for areas where they have long compact rate of taxation , Mr governor has approved that we can take money from our votes and go there and do a project directly by asking them what they need even in a church, you know churches do not pay Land Use Charge, but if all their congregation come together and say they have paid, let’s say  a congregation of three hundred and then two hundred and fifty have paid, we will go there to do something. It happened in Ifedore local government. A school there paid Land Use Charge, for Akure and when I learnt that instead of paying seven thousand, they paid ten thousand per year, nursery and primary school, we went there and we found out that they needed generator and we bought it for them, they could not believe it, we are going to do more of it to complement what the government is doing, because government cannot buy generators, when we have instances like this, we will do the needful, because when I assumed office, the governor told me that come, he did not become the governor to impoverish the people of the state, I actually want to make their lives better, I have not said don’t do your taxes or not doing your project, but please it has to be done with human feelings, that is why we are not doing much enforcement, that is why we are going after those who can afford to pay, Mr Governor is so passionate about the people of the state.

On a final note, what is your advice to the people of Ondo State?

My advice for the people is this, when you have a team or a leader that is working, I think we should support him or that team for sustainable development, For us in Ondo State Internal Revenue Service, he has provided all the support that we need and he has also admonished us about how we should treat the people of the state. It is a strategic objective and all the money that we are bringing in we can all see what the government is doing with the money, I therefore advise them to keep cooperating by coming to us voluntarily to pay taxes.

Development will continue if the money is going up. Our target in the next four years is N4.5 billion monthly, if it gets to that level, we do not need to wait for federal allocation before paying civil servants salaries. If we get to that level, we will know that Ondo State has got to  a sustainable level of taxation, but we need time, though I was appointed late, but what we started, we can all see it flowing from money to projects and there is a master plan for the projects, I admonish people of the state to continue the support, so as to get to a  sustainable level, when we get there, we will know that nothing can change the path that has been set. We want to also inform them that we have contact numbers, on any issue regarding taxation ,they should call us, we would respond. We have seen people coming to us, and it has made the job easier for us, we do not need to chase many people, people are not hiding from us anymore, they talk to us, no high handedness, let us continue the support.

Owena Press Limited (Publisher of The Hope Newspaper), Akure

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