HOW FOWLER WILL SHAPE AFRICA’S ECONOMY IN 2018: A Special Report on the Nigeria’s Federal Inland Revenue Service
By Kings UBA, Abuja: There is no gain saying the fact that Africa currently habours the extreme poor of this world. Report of a British Broadcasting Corporation (BBC) research says that the poorest part of the world could be “the desolate, dusty town of Pibor on South Sudan’s border with Ethiopia where there is no running water, no electricity and little but mud huts for the population to live in. You would be hard put to find a poorer place anywhere on earth”. But BBC may not have seen poorer places in Africa where words could not illustrate the pretty appalling standard of living.
But on the contrast, Africa harbours some of the richest and most influential individuals in the world. Forbes list of world’s richest in 2017 has some Africans: from Nigeria, South Africa, Egypt among others. And these few extreme rich live side-by-side with the multitude of the extreme poor in this decrepit Africa society.
The question is, why is Africa this poor–always clustering at the bottom of the United Nations Human Development Index? Here are some analytics explanations: Hajia Amina Az-Zubair, Deputy Secretary-General of the United Nations a former Nigerian president’s senior adviser on poverty issues, told BBC that Africa is still suffering from the impacts of colonialism. She said that colonialism “was all about take, not build”, and that this attitude “transferred itself into a lot of mindsets” in Africa.
Drawing from Hajia Zubair’s inspiration, one could easily say that the problem with Africa has been lack of effective and efficient mechanism for wealth distribution, which is taxation.
To steer African economy in the right direction, there must be effective tax system in Africa. To a large extent, this is where the role of African Tax Administration Forum (ATAF) comes to play.
It is against this backdrop that the ATAF led by Tunde Fowler from Nigeria is repositioning ATAF to not only collect taxes but also to influence the governments of member countries to put the tax money to good use in the interest of the citizens.
Therefore, all hopes that Africa will pull through this economic lull are on taxation. And the bucks stop on Fowler’s desk. Fowler is the Chairman of the African Tax Administration Forum. He has been inaugurated alongside other four taxmen in Africa to join the 25-member United Nations Committee of tax experts. Fowler is also the Executive Chairman of Nigeria’s Federal Inland Revenue, one of the most promising economies in Africa.
Fowler’s Capacity to Deliver
The ATAF, which is the rallying point for taxation in Africa has received some breath since 2016 when Fowler was elected its Chairman. His election came when economies globally needed urgent help, and Africa needed more help. ATAF has become a body to reckon with on issues of African economy. ATAF is speaking in one voice now, more than ever, and this will be a piece of good news for Africa.
In September, 2017, ATAF launched Transfer Pricing Tool Kit which was a veritable answer to the questions of Base Erosion and Profit Shifting (BEPS) extreme tax planning and Illicit Financial Flow from Africa. The Thambo Mbeki High Level Panel on IFF had reported that Africa loses $50 billion annually to IFF. The tool kit was launched during ATAF third International Conference in Abuja, to address for the use of offshore marketing hubs for financial fraud. The risk is that the marketing hub pays an artificially low price to the mine, reducing profits in the host country, and sells the product onto a third party at market rate, allowing profits to accumulate with the hub, often in a low-tax jurisdiction.
Before the September meeting, ATAF had a High-Level Tax Dialogue: Forging the Nexus Between Tax Policy And Tax Administration in Africa in Uganda in August. ATAF, through its technical assistance country programs has consistently observed an urgent need for tax policy decisions to effect the legislative changes required for effective revenue collection. This ranges from comprehension of the subject at hand, effecting relevant laws for stakeholder involvement, and decisions that bridge the gaps for known avenues for IFFs, as well as the need to build capacity and expertise to address revenue loss.
Another exciting achievement has been the launch of the first African Tax Outlook, featuring 15 African countries, an important document for tax policy analysis. In cooperation with the OECD, also released was the inaugural edition of Revenue Statistics in Africa, featuring revenue data of eight-member administrations.
The last ATAF conference was a testimonial that Fowler’s ATAF is effective.
Fowler in Charge of the Federal Inland Revenue Service
It is given that oil revenue is still stuttering and its future is even bleaker. Nigeria is therefore focusing on the Non-oil component of the economy. In 2017, taxes from non-oil sources accounted for 63 per cent, while oil tax accounted for 38 per cent of the total collection. This is not coming on a platter of gold. There are some brains behind it, among whom is Tunde Fowler, the Executive Chairman of FIRS and Chairman of Nigeria’s Joint Tax Board. Minister of Finance, Kemi Adeosun, said recently that Nigeria is no longer an oil economy.
Despite the stress on oil revenue, Fowler’s FIRS generated N4.03trn in 2017. That was an 82.38 per cent of government target of N4.89tn for the year and N720bn more than the 2016 total collection figure of N3.3tn.
One could confidently say that Nigeria is gradually shedding the toga of oil dependent economy. This reality is a culmination of various tax reforms in the FIRS especially in the last two years when Fowler revolutionised the agency through Information and Communication Technology. FIRS introduced six key electronic solutions (e-Services) to enhance convenience, transparency and round the clock payment of taxes. Key services of FIRS could be accessed electronically are: taxpayer registration (through e-Registration); payment of Stamp Duties (through e-Stamp Duty); payment of taxes (through online payment: e-tax pay); receiving of electronic receipt after payment of taxes (through e-Receipt); filing tax returns (through e-filing) and online Tax Clearance Certificates (TCC) through electronic Tax Clearance Certificate (e-TCC).
The implication of e- Receipt is that when tax payments are made, an electronic notification will be automatically sent to the taxpayer’s email and or phone number within 24 hours after payment. If for any reason a taxpayer loses the print out, they can access FIRS e-Receipt platform by logging into the FIRS website and downloading their receipt. This process eliminates manual interventions.
The e-TCC provides an e-repository of all Tax Clearance Certificates (TCCs) issued by FIRS. It enables FIRS Staff and authorised third parties to verify TCCs, thereby reducing the incidence of fraudulent certificates. It automatically sends TCCs to the emails of taxpayers and also enables them to request for and print their TCCs online.
Although hard copies will still be available for collection, a system generated TCC is as tenable as the hard copy. The aim of this process is to ensure that taxpayers do not suffer unduly where there is need for urgent tendering of the TCC. The system allow for TCC validation so that a TCC could be verified by third parties online using the TCC number. Restricted TCCs could also be generated online for temporary use where there is an unresolved dispute. This will ensure that the taxpayer does not suffer unduly.
To do business with FIRS, one needs to be duly registered. Now, you could get registered and authenticated online by visiting the FIRS website www.firs.gov.ng and taking the following steps:
- Long in and proceed to the e-Services tab
- Click on the log-in or register tab and input your Taxpayer Identification Number (TIN) or RC Number
- Choose a user-name and password upon successful registration
- Click on Register and a PIN will be sent to your email for authentication to complete the process.
For taxpayers who have been registered with the Corporate Affairs Commission (CAC) but have no TIN, the e-registration process is as follows:
- Log onto https://apps.firs.gov.ng/tinverification/
- Enter the CAC registration number (i.e your RC or BN number
- Enter the Completely Automated Public Turing test to tell Computers and Humans Apart (CAPTCHA) image that will be displayed
- If your search is successful, you can input your email address and click on the send to my mail button to have the detail sent to your mail
- Also check your spam folder if you do not see the mail in your inbox.
Newly incorporated businesses are to go to: www.cac.gov.ng and follow the end to end process which h includes payment of Stamp Duties to complete your incorporation process.
Under the new e-Stamp Duty from the FIRS, stamping could be done from the comfort of your home or office. In the past, it required a physical stamp. For a dutiable instruments, the process is as follows:
- Log on to www.firs.gov.ng
- Click on the e-Services
- Click on e-Stamp Duty
- Log in or sign-up
- Obtain your credentials (username, password) through your mail
- Choose a username or password upon successful registration
- Log in and select the relevant Stamp Duty instrument
- Fill in the form and pay online through the Integrated Payment Gateway
- A link to download your e-Stamp Duty certificate will be automatically sent to your mail.
Stamp Duty is a tax levied on documents such as receipts, land transactions and other legal documents.
Fowler said that the introduction of the new solutions is one of the key steps to make services convenient, easy and available everywhere and at all times. “It is a revolution in tax administration that combines innovation, convenience and transparency”, the FIRS Chairman said.
Before Fowler became FIRS Chairman, he headed the Lagos State Internal Revenue Service (LIRS) where he transformed the state’s economy through the instrument of taxation.
Pere, a graduate of economics who was fishing in one oiled river in Bayelsa told reporters that African countries have had a lot of rulers who have exploited the African citizen.
“The ruling class take the collective till which belongs to the people. They do not pay taxes but they enforce tax payment on the lower class. They perpetuate themselves in offices so they could continue living large on the tax money squeezed from the poor”, Pere said dejectedly.
Pere said poor political leadership in Africa has engendered intra-class war—war among the poor. “We, the citizens are left to fight intra-class wars. It is ultimately the war from of the poor against the poor. Thousands are killed but nearly none of the ruling class has ever been a casualty”
There are so much wars in Africa. From one war that destroyed lives and livelihood to another more devastating war. But the problem of Africa is not war. Ellen Johnson-Sirleaf, former President of Liberia said she had underestimated the level of corruption in her country when she took office. “Maybe I should have sacked the whole government when I came to power,” she said. “Africa is not poor,” President Johnson-Sirleaf added, “it is poorly managed.”
The BBC report concluded that for Africa to have economic progress, Africans both the leaders and the led must have a re-orientation of the mind that supports “building (of the economy) instead of taking (from the economy)”
For Africa, 2018 will be a good year. Fowler’s ATAF has given itself multiple roles on African economy. What it requires is for Fowler to plot the tax graph and the job will be done.