Professionalizing revenue collection in Delta State

Author: By Princess Tureme

Generally, there are three major indicators or measures of an efficient tax system - number of tax payments, time required to comply with tax obligations and total tax.

In Delta State, factors which had hindered the timely achievement of a well organised system of taxation included multiplicity of taxes before July 2009, where there is inadequate use of technology in tax collection and a defective tax dispute resolution process.

Among several other reasons adduced for the cumbersome nature of tax administration in the state were: lack of transparency and accounting, collection of taxes by touts and lack of tax awareness.

It was to eradicate the aforementioned challenges and to sanitise the revenue collection process in the state, that the Delta State Board of Internal Revenue led by Hon. Joel Onowakpo Thomas, started a process of involving experienced Tax  Professionals and accountants in the administration of taxes in the state.

The collaboration between the professionals in the state under the auspices of the Tax Audit Monitoring Agency (TAMA) and the Board of internal Revenue is already generating huge results as reflected in the tax collections in the past two years.

TAMA which comprises bodies/groups of tested professionals, tax practitioners and accountants, skilled in tax management and administration was instituted by DBIR in May 2011 with the sole objective of bringing professionalism and expertise to bear in relating with all companies in Delta state, improve on the state IGR and expand on DBIR tax net.

TAMA was also saddled with the responsibility of monitoring, auditing and investigating companies operating in Delta state shore, to enable the attainment of the actual tax due (i.e PAYE & WHT) and payable to the state Government.

 In carrying out its responsibility, the Tax  Professionals largely employed moral-suasion to convince its various clients on reasons why they should willingly comply with the tax laws in the state, rather than being compelled to do so.

Having created the conducive environment for operation, members of TAMA had been liaising with their clients to ensure that full disclosure of all employees, adequate/actual PAYE deductions, full disclosure of all contractors’ details and adequate/actual deductions of WHT.

The understanding that exists among the Board, Tax Professionals and the clients has further helped in ensuring full disclosure of all expatriate employees, provision of actual expatriate quota and monthly immigration returns, provision of expatriate deletion where applicable and prompt remittance of monthly PAYE and WHT to the bank.

Collection of DBIR receipts from their local Tax offices and provision of copies of monthly PAYE and WHT receipts to TAMA for record purpose has also become routine. At the end of each calendar year, TAMA also promptly carried out an end of year Tax Audit of its clients.

This strong and organised relationship between DBIR, TAMA and the tax-paying corporate organizations and individuals has further enhanced an efficient tax system in the state as virtually all clients promptly comply with Tax audit request.

During this period, the Tax Audit Monitoring Agency has successfully Tax-audited all its clients for all prior years before their appointment,  while some for the 2011 financial year and 2012 financial year are already completed.

Because of the collaboration between the tax professionals and the tax board, tax compliance has increased, as most clients have paid up all their tax liabilities to DBIR.

TAMA also liaises between its clients and DBIR at the instance of its clients and thus enhance tax compliance by providing relevant DBIR tax details to enable the creation of a better and robust tax template for their use, expansion of tax net: sourcing of clients to increase DBIR tax clientele base and creation of client education/awareness to help them embrace DBIR.

 This innovative collaboration between the DBIR and TAMA has contributed immensely to the current improvement of Delta State IGR .

However, in order to  take the “Delta beyond Oil’’ policy to the next level, there is the need to create further tax awareness and enlightenment of the informal sector to further get more tax paying public into the tax net of the state.

The success of the working relationship between the Tax Professionals and DBIR, has also been attested to by the Executive Chairman of the Board, Hon.  Joel-Onowakpo Thomas, who said the revenue agency had engaged the services of tax professionals to work on behalf of the state government in the new reforms.

He told some World Bank functionaries recently that the consultants were going through the books of the different companies in a cordial atmosphere with their officials, and come up with the relevant taxes to be paid, based on the laws of the land.

“In the past, multiple notices were issued in respect of taxes but the new partnership between the board and the companies is meant to address such matters. The agency is committed to ensuring efficient tax generation that would lead to increased for the state.

According to Hon. Joel-Onowakpo, measures put in place were already yielding appreciable results and had led to “the remarkable increase in the State’s Internally Generated Revenue (IGR) from N1.2 billion when the Board was inaugurated July 2009 to N5.7 billion recorded by January this year.”

He noted that the board’s relationship with the tax gurus had led to the blocking of all the leakages in the tax system .  “Before 2009 the dependence on oil in the state was 90 per cent and what that meant was that if for instance there was a drop or a frustration in the oil price, it will affect everything in the state including the payment of salaries”, he added.

Tax Professionals at a recently held meeting in Warri, unanimously agreed that by empowering them through engagement as Tax Consultants to work with the State Board of Internal Revenue (SBIR) in the areas of Tax Audit and Investigations to recover arrears of taxes, the state government has also succeeded in putting the collection of taxes on the path of sanity.

They added that with the inclusion of Tax  Professionals in the collection of taxes in the state, the government has also succeeded in creating employment for young tax consultants in the state who are now working as employees under the consultants.

However, the concept of ‘’Delta beyond Oil’’ by the Executive Governor of Delta State, His Excellency, Dr. Emmanuel Ewetan Uduaghan which s vastly gaining ground in the state was conceived as an alternative to oil receipts while focusing attention mainly on the state’s Internally Generated Revenue .

Other such strategies adopted by the State Government to empower the citizens so as to achieve the vision ‘’Delta Beyond Oil’’ include the provision of Micro-Credit Schemes aimed at supporting the Micro, Small and Medium Scale Enterprises.

This apart, the state government has been providing basic infrastructural facilities to assist the private sector operators to grow their businesses and thereby increase job opportunities for the youths in the State.

There has also been tremendous progress and improvement in security situation in Delta State through the commissioning of the Delta State Waterways Security Committee.

The empowerment of the Delta State Oil Producing Areas Development Commission (DESOPADEC), to address issues of under-development and creation of jobs in the oil producing communities of Delta State with the much needed basic facilities in the host communities is also making some desired positive impact.

Other efforts by the state to refocus the economy from an oil-based one include the expansion of Osubi Airport, near Warri, investment of over N15 billion (approximately US$93.7m) in Federal Government IPP Project as part of her counterpart funding to step up power generation and distribution in the state and partnership with private investors towards the completion of an Independent Power Project (IPP) to produce power for the usage of the State.

Over 100,000 people have also benefited from the promotion of commercial and industrial entrepreneurship scheme and the development of the tourism sector of the State respectively and the development of the marine sector in cooperation with Federal Government towards building a multi-million dollar landing jetty in Okwagbe, to support the state’s transport infrastructure.

The Industrial Parks such as the Warri Industrial and Business Park, the Koko and Ogidigben Industrial Park/Export Free Trade Zone and the Asaba Information and Communication Technology (ICT) Park are some further measures to take the Delta State economy from depending on allocations from oil revenues.

urhobotimes.com