Taxpayers in Rivers State are regarded and treated as development partners, so declared the Rivers State Internal Revenue Service (RIRS). The Executive Chairman of the Board, Adoage Norteh, who disclosed this in Port Harcourt, said this is the reason why taxpayers were made to be part of the process in the informal sector tax initiative being rolled out in Rivers State this month. Norteh told BusinessDay in an exclusive interview that the regard shown to the taxpayers informed the decision to set up a joint committee of tax paying groups and the RIRS which recently submitted a resolution on taxes that would be paid and applicable rates, a resolution aimed at calming tensions to promote ease of doing business in Rivers State.
The RIRS had made the private sector to lead the discourse as chairman and secretary, thus removing all fears that the committee was rather a rubber stamp. This is expected to send positive signals to the entire taxpaying community in Rivers State that an acceptable and peaceful tax collection system is born. Other states having chaotic informal sector tax collection systems could also borrow a leaf, sources said. The presumptive tax committee consisted of the chairman of the Rivers State Joint Committee on Implementation of Informal Sector Tax Collection, Uba Obasi, who represented the Manufacturers Association of Nigeria (MAN) in the state, backed by the secretary of the committee, representing the Nigeria Bar Association, Port Harcourt Branch and Clement Akanibo from the organized private sector and member of the Port Harcourt Chamber of Commerce. Other members include: National Association of Small Scale Industrialists, Pillars of Association, Rivers State Drivers Cooperative, National Union of Road Transport Workers, Tricycle Operators and Traders Union, among others.
Obasi, representing MAN as chairman of the committee said the objective was to look into how the RIRS could capture the revenue of the informal sector in the state. He told newsmen that it was also to eliminate multiple taxes and usher in peace in the tax collection process.
He stated: “We have just endorsed the report we fashioned out and it would be forwarded to the Executive Chairman of the RIRS. If approved, it would bring to an end the problems bedeviling tax collection mechanism in the informal sector tax collection in the state. We need the information to spread to all taxpayers in Rivers State in order to protect the tax process from touts and ensure that collections made get to the coffers of Government. However, the Revenue Board has agreed on how to collect taxes from the informal sector which is expected to take off this August.”
Explaining the significance of the historic resolutions, the RIRS boss reminded taxpayers that the Rivers infrastructural development and facilities can only be sustained through their collaboration and cooperation. It is noteworthy that Rivers IGR did not crash when other aspects of the national economy faced challenges and when many businesses collapsed. Instead, the IGR of the state recorded modest increases. According to sources, IGR rose from an average of 5.5Bn per month in 2016 to about 10Bn monthly in 2017 when the present tax administration took over. This is expected to further rise given these Informal Sector tax initiatives.
Norteh observed that the beauty of it all is that the state’s IGR increases were achieved without fracas and without street wars, but rather with an engendered friendly tax atmosphere. This atmosphere has been capped with historic tax resolutions reached last week in Port Harcourt between the RIRS and private sector leaders.
This first-ever resolution is expected to form the bedrock of the roll-out of the informal sector tax drive after many months of consultations, conferences and stakeholder sessions in Port Harcourt. The RIRS admitted that the engagement processes and conference series may have caused long delays and cost huge resources but that it remains the best strategy that could meet the cardinal objective of taxation in the state. Gov. Wike had given a clear mandate that taxes must not be collected with chaos, violence or tension in Rivers State. In order to achieve this objective, the RIRS undertook to engage stakeholders in organised conferences and meetings to get everyone on board for a seamless process. Norteh said; “Taxes are a creation of the law; however, it should not be approached from a punitive perspective. Though it is mandatory by law to pay taxes, taxpayers should be made to see it as not only a requirement of the law but also a demonstration of responsibility. Taxes hold numerous benefits; besides, it should be seen as a duty and from responsibility standpoint.”
Norteh explained that it is for this reason that the RIRS hopes to host a National Tax Roundtable in Port Harcourt to deepen the state’s new tax engagement processes that have engendered peace in tax collection. Experts said it is time the state positioned Port Harcourt as a tax-friendly city; a city of tax collection creativity and tax ideas. “We think it’s time we changed the Rivers narrative that will address the positives of taxation.”
He stated: “I was able to create the engagement process with support of taxpayers as we prepared to roll out the informal sector tax drive because I am not more a tax administrator than I am a taxpayer.”
The engagement processes ended up involving taxpayers in the process. “The overall target is to boost ease of doing business in Rivers State, and most business groups such as PHCCIMA, MAN, Rivers Entrepreneurs and Investment Forum (REIF), Pillar of Associations, and other SME groups agreed that the state has been calm in terms of tax collection procedures even if the IGR has been rising.
“We treated taxpayers as development partners, not enemies. It is only those that may refuse to pay after all these measures and concessions would have been made that would be treated as tax evaders; and evasion, as we all know, is a criminal act. Many observers would agree that the decision to roll out the informal sector tax drive was reached in the last quarter of 2018 to kick-start in January 2019, but we delayed this up till August 2019, all to get the buy-in or cooperation of the private sector segments.
“We organized meetings and conferences for every segment from the unstructured informal player to the structured. At the end, we were motivated to create a joint committee of the sector-leaders and RIRS staff to arrive at what is right, acceptable and enforceable. We could have easily announced the rates and taxes and push men into the roads to extract the taxes, but we were bent on meeting the Government’s policy direction which is ease of doing business tax drive.
“Now, the taxpayers trust the tax administration in the state and we both have realized that we must dignify each other. Yes, tax is a creation of law and most persons do not see it as a good thing, but we have reached mutual understanding and have issued resolutions that would drive the process in a peaceful and harmonious manner.
“Many have asked if by this we have met the target for optimal tax practice and revenue yield in Rivers State. It is important, however, to note that we do not measure success by only the amount of revenue generated each month or year; we also measure it from tax education, peace in the tax space, ease of doing business, among other considerations.”
He stated thus; “What we keep striving at is to bring as many taxable persons as possible into the tax bracket. It would not only boost IGR but would lessen the tax burden on the identified taxpayers already in the tax net. By streamlining the processes involving the private sector in arriving at rates and collection modalities, we have built huge trust and confidence that would create voluntary tax compliance.”
Norteh said there is still great need for taxpayer’s education and continuous engagement. “It is work in progress. People know that there was a freeze on payment of taxes by the informal sector people especially small businesses because things were very hard in the country. Now, citizens and residents in the state should reciprocate by demonstrating some readiness to be development partners even as we do not want to roll out all the subheads at once.”
But who is an Informal Sector Player? The RIRS boss said: “We would come back to that but let everyone come into the tax net first and begin to pay something. Definitions can come much later. What matters for now is ease of doing business and creating a harmonious tax space”.
