BusinessDay

We want Lagosians to whistle-blow on all financial misconducts – LIRS

Last month, the Lagos State government kicked off a whistle blowing program, which it said was to drive good governance in the state. TOKUNBO AKANDE, chief compliance officer, Lagos Internal Revenue Service (LIRS), the agency driving the initiative, spoke with CALEB OJEWALE and explained all that it entails.

What does the whistle-blower initiative entail, and what operational structure exists in achieving its objectives?

It is a state-wide policy, and an integral part of the revenue reforms program of the state which started a long time ago, but it was given the push by the current administration.

It is being done in phases and that’s why one agency of government was picked, which LIRS, to kickstart the program before other MDAs are incorporated into it.

LIRS was picked because it has probably the widest interface with the citizens of the state, and what is it for? It’s just to have feedback from the citizens on how well we are doing at the state level, because it takes two to tango. You have the citizens, the corporate entities, and you have the state government (including agencies that are providing services) and they are all interlinked, because it is at the intersection of those relationships that we have all these issues that come up.

The key thing is that the state prides itself in achieving good governance. However, you cannot achieve good governance on your own alone; you will need the collaborative effort of all stakeholders. So if any citizen or resident of the state sees anything that is not right, then this platform provides the opportunity for you to actually say it, and then allows the state to respond appropriately without compromising the identity of that person that has reported the case.

So the state is saying, please help us improve and we are sure there will be no backlash against you for saying what you know, or perceive is not right.

So when you say what is not right, in what context exactly?

In the context of governance but at this stage now, it’s as it relates to maybe operations of LIRS and issues that relate to tax and revenue generation. The constitution actually says that every citizen must truthfully declare his income from all sources and pay appropriate taxes to the authority.

Essentially it’s a self-assessment system that we have in Nigeria. So if I’m working in an organization and I notice that there are 10 of us, we should be paying taxes to the government and it seems we are not doing that, you can whistle blow.

If you think; this is how much I’m being paid but when I needed my tax clearance certificate to do some other transactions, I found there’s disparity in what the tax authority has as my income and what my employer has been deducting, you can whistle blow. Then if you have interactions with employees of LIRS and you see things that are unethical that are being done, you whistle blow on those staff as well.

If I’m working in an organization and I notice that there are 10 of us, we should be paying taxes to the government and it seems we are not doing that, you can whistle blow.

What prompted this? Did the government notice something that made them think we need a whistleblower policy?

I will say is that it is part of the focus of the administration to ensure good governance. How do you achieve good governance? You need participatory engagement of all the citizens.

We’ve had a series of reforms, so this is just another step along the reforms that we are carrying out in the state because it is a consistent approach to improving the system. So it’s just another step along the way.

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When someone has volunteered information, is there a framework within this policy to protect them and make sure there is no retaliation or anything like that?

This system is not even managed by the state, it has been outsourced. It was outsourced to one of the top four accounting firms who has a reputation for this kind of assignment. And within that framework, you have three levels of disclosure or three levels of anonymity.

The whistleblower can elect to be completely anonymous; just disclose the issue. He/she can elect to be partially anonymous. So he/she provides information about their identity so that they can get feedback from the platform. You know, if you’re completely anonymous, you can’t get feedback from the platform.

Then you can also have full disclosure. That is, you are sure of your position and you are sure the state will protect you so you know that you can give your name out and that there’s no hiding anything.

For people who may want to volunteer information, what’s the process, how do they go about it?

We have four possible channels, which you can use. There’s a toll-free channel which is at no cost to you. Just get your phone and call 0800-tip-off, that is, 0800 847 6337. Once you call that number, a responder will attend to you.

We also have the website (tipoffs.deloitte.com.ng). Of course, it’s https so it’s a secured site. Then you have the option of email, that is: tipoffs@deloittee.com.ng. Then you have of course, the app, which you can download from the Google Play Store or the Apple Store as well, called tipoffs anonymous app.

You can use any of those platforms to accurately drive the issues to the consultant who manages on behalf of the state.

What is the verification process like, to authenticate claims to make sure that people are also not being bogus, and to make sure that the desired outcomes emanate?

Essentially what the platform does is that there’s two steps of verification. Every single report brought in is captured. Now, Deloitte has another partner that will independently assess the issues raised, and then it will be escalated. So for now because it’s basically LIRS, escalated to us, it is on that report you will see the ones that are actionable and the ones that are not.

If people (for instance, neighbours) have issues among themselves, it’s not a Lagos State issue. Yes, it will be a Lagos State issue if somebody is injured and what have you, but it will not be about Public Finance Management, good governance issue. This, as of now, is restricted to good governance as it relates to public finance and focus on revenue administration and collection.

There have been some sentiments expressed that already there’s a lot of tax enforcements by LIRS. So what do you need a whistleblower policy for again? They probably think it’s an Oliver twist approach. Do you agree?

No! You see, it is not an LIRS or Lagos State thing, but for all residents of Lagos. When each of us contributes our own little bit here and there, it improves the efficiency and effectiveness of the system.

This is a way of saying you are also part and parcel of the government, of making things better for the society. If people know that if they do a wrong thing, it will be escalated, the tendency is for them not to do it.

For the sake of clarity, can you give us a picture of what qualifies under this whistle blowing policy? What do you expect and what is probably not the typical issue that should come here?

What we expect under this phase of the whistle blowing program that is focused on LIRS operation are any infringements on that constitutional obligation to pay tax; it qualifies for you to whistle blow.

If somebody has filed a false report and you are aware, then you can whistle blow on it. If somebody has underpaid what he should, then you can whistle blow on it. So once you take it from that angle, it narrows down and shows you what the issues are- under this phase.

Like I said, it’s a State-wide thing. It will be expanded to involve other agencies. So by the time it covers the transport sector, for instance, there will be other issues that will come in. But I think what Lagos State has done is that it has learnt from the federal experience that rather than just open it up completely, you start from seeing how the thing works.

What’s in it for the whistleblower? Are there compensation?

I think it was the federal government that did something of a whistle blowing program sometime in 2017, and the issue of compensation was clearly stated, and before you knew it, it was the issue of compensation that became the primary focus of the program and that’s why that particular program became moribund.

So I will tell you from my own perspective, compensation for whistle blowing, should it be a like-to-have feature or even a love-to-have feature, I would say Yes.

But should it be the primary focus of the program, the answer is No. This is because the essence of the program is participatory engagement towards good governance.

If in order to encourage people without diverting their attention from the primary focus of the program, we want to put in a compensatory component, why not? But to avoid the mistake that was made at the federal level, at this first phase, the Lagos State government has not done that.

We want people to see it as their own project. Once they see it as their own project, and they are driving it and they can see the benefit that will come out of it, because things will improve generally, everybody will become efficient and will become effective.

Once people pay into a common pool, they’re likely to ask questions of the government, that what are you doing with taxpayers’ money? So that’s what we are trying to drive.

But it is not part of it as at now, it is what we like to have as a feature of the program and it’s not impossible that once we have traction and people are seeing it (we don’t want to distract people from the basic goal of the program), then it is something that the state can consider incorporating in the near future.

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