FIRS advocates autonomy of tax administrators

Tunde Fowler, executive chairman, Federal Inland Revenue Service (FIRS), has added his voice to the calls for autonomy of tax administrators in Africa for effective performance.

Fowler in his advocacy painted a bright future for tax administration in Africa, stating that the continent held much more revenue generation prospects.

According to a statement issued Suday by Wahab Gbadamosi, FIRS head of communications and Servicom Department, Fowler made the advocacy while speaking to chief executives of African Tax Authorities at the African Tax Administration Forum and International Monetary Fund (ATAF-IMF) seminar in Cape Town, South Africa, recently.

According to the statement, Fowler urged African leaders to grant autonomy to their revenue authorities, as this would strengthen the tax institutions and prime them to generate more revenue for their countries.

In his presentation titled: “Establishment of An Autonomous Revenue Authority With An Independent Board – The Nigerian Experience,” Fowler pointed out that the autonomy of the Nigeria’s tax authorities had triggered a surge in collection by tax authorities in Nigeria.

“Clearly, Revenue Authorities across Africa have the potentials to generate funding for their respective governments and they will perform better if they are allowed to fully be in charge of their day to day operations and empowered to hire staff, pay competitive salaries and provide regular training for staff.”

Fowler, who mid-wifed the autonomy of Lagos Internal Revenue Service (LIRS) in Nigeria, while sharing the experience of the autonomous FIRS and LIRS, said the Nigeria’s experience is worthwhile: “The compelling evidence from Nigeria’s experience is that wherever Revenue Authorities have been granted operational, administrative and financial autonomy and allowed to operate with minimal civil service bureaucratic encumbrances, revenue administration has been enhanced and tax collection performance has gone up significantly.

“Autonomous Revenue Authorities with independent Boards have proven to be beneficial for the actualisation of their mandate to generate funding that government require for projects and programmes.

He pointed out that tax revenue grew from N1.846 trillion in 2007 when FIRS was granted autonomy to an average of over N4.5 trillion in 2015. In the LIRS, tax revenue grew from N50 billion in 2007 to N270 billion in 2015.

“In the Nigerian experience, the falling revenues from oil in the 1990s, prompted Government to focus more on tax revenue generation, by adopting series of tax reforms initiatives,” he said.

He noted that owing to years of neglect due to government’s focus on revenues from oil, tax administration operated at less than optimal levels.

He also recalled that the Revenue Authority was faced with several challenges such as: “operating under the Ministry of Finance with the attendant bureaucratic encumbrances, absence of financial and administrative autonomy, existence of leakages in revenue collection due to lack of transparency and corrupt practices by some tax officials and taxpayers.

 Others are: “low staff morale as a result of poor remuneration and poor working conditions of tax officials; manual means of tax operations/low usage of Information and Communication Technology (ICT); neglect of taxpayer education and absence of quality service delivery and inadequate human resources and skills as a result of inadequate training.” he enumerated.

The FIRS Boss recalled various Study and Working Group reports that have shaped tax administration in Nigeria. “The recommendations of the Study and Working Groups culminated in the establishment in 2007, of an autonomous FIRS with its own independent Board and the promulgation of the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007)”

According to Fowler, it was the second time a tax agency would enjoy autonomy in Nigeria with an Act of Parliament. The first being the enactment of the Lagos State Internal Revenue Service Law in 2006 by the Lagos State House of Assembly.

He explained that the FIRS, with an oversight by an independent Board, has been able to initiate and implement various revenue collection enhancement projects and programmes that has really helped them achieve their goals.

Fowler reiterated the need to put in place requisite legal and administrative framework to ensure that the Revenue Authority can function with less public service bottlenecks and have access to the resources required to deliver on their mandate for domestic resource mobilization and funding for governments across Africa.

He noted too, that political support from the top most level by political office holders and general policy direction from the supervisory Ministries of Finance would be critical to the success of Revenue Authorities.