Curious Tax Collection And Probity In Rivers

tax-identification-numberANY keen observer of public affairs in Rivers State will have noticed that, in recent weeks, there has been intense media engagement by leading political gladiators, or their proxies, in the state. The sense that one can make of it all is that, in their robust public engagement, Rivers gladiators are no doubt responding to stimuli from the national stage, where the transparency and anti-corruption stance of President Muhammadu Buhari has triggered a new wave of interrogation of previous helmsmen at the state level. One can easily describe it as the federalisation of probity.

In the case of Rivers, the flurry of national media outing apparently began with the well-publicised petition by The Integrity Group, a Port Harcourt-based civil society organisation focused on good governance. The group petitioned the Economic and Financial Crimes Commission (EFFC) and President Buhari, making three broad categories of allegations against Mr Rotimi Chibuike Amaechi, immediate past Governor of Rivers State.

The three categories of allegations concern the sale of Rivers State power projects, and what reportedly happened to the proceeds amounting to N60.48 billion; the proposal to build the Karibi Whyte Specialist Hospital, for which payment was allegedly made, yet it turned out to be a failed contract, deliberately so, according to The Integrity Group. The third category relates to the appointment of, and payment of huge sums to a firm, which served as a tax collection consultant to the Rivers State Government. The firm is said to have been paid over N1.5 billion within a matter of weeks.

Now, former Governor Amaechi has himself responded indirectly to the allegations, dismissing them as the brainchild of his political traducers whose principal object is to deny him appointment in President Buhari’s government. This past week, some officers—-the Secretary to the State Government, and Commissioner for Finance—-who served under Amaechi, took out newspaper adverts, in response to the allegations by The Integrity Group.

Coincidentally, on the day the advert of Amaechi’s former officers appeared at pp. 42-47 of The Nation newspaper of Thursday, Aug. 13, 2015, The Integrity Group also had their advert published at pp. 48-55 of the same edition of the newspaper. So, the gladiators have taken their respective cases to the court of public opinion. In so doing, they have published documents, which read carefully, provide detailed background, but equally provoke questions that remain unanswered.

My interest in this piece relates to the appointment of the tax consultant and the weighty issue of probity concerning payment for services deemed rendered by the consultant. There is in existence the Rivers State Internal Revenue Service, established by law, in particular, Law No. 12 of 2012, which granted the Service administrative and financial autonomy. Under the law, the Rivers Internal Revenue Service retains five (5) per cent as administrative costs for the revenue it generates.

By the end of December 2014, the Rivers Revenue Service was generating an average of N7.5 billion monthly. Yet, in January 2015, the Rivers State Government under Amaechi entered into a Memorandum of Agreement with a new tax collection consultant. It would appear from the subsequent correspondence between the Executive Chairman of the Rivers Revenue Service, and the then Rivers Commissioner of Finance, that the state Revenue Service was not party to the negotiations that led to the Memorandum of Agreement between the state government and the new tax collection consultant.

This is what should worry observers and stakeholders: the Agreement was executed by the parties on January 21, 2015, but took effect from January 01, 2015. One crucial clause states that the new consultant shall be entitled to fees amounting to 12 per cent of revenues collected above N2.5 billion. Recall that the Rivers Revenue Service was already raking in about N7.5 billion monthly. So, why lower the threshold to N2.5 billion, and why increase the percentage ratio of fees? The Rivers Revenue Service was empowered to retain five (5); yet, a new consultant was being granted 12 per cent with a much lower threshold of IGR collected. In all of this, there was no indication that the state’s collectible IGR had dwindled, nor had the Revenue Service become suddenly incapable of meeting its target.

Notably, the Executive Chairman of the Rivers Revenue Service raised objection to the rationale for the fee clause in the Memorandum of Agreement, in addition to a clause that had the effect of excluding state government officials from certain collection duties. The former Rivers Commissioner for Finance responded, stating in the documents published: “I am dismayed to note that after our last meeting, where I painstakingly explained to you the rationale behind the engagement of the said consultants and despite the approval and express instructions from His Excellency, the Executive Governor, you have continued to raise reservations on the actions.” Also, the former Commissioner advised: “If for any reason you have further grievances, I urge you to direct that to His Excellency, the Executive Governor.”

However, what should trigger an alarm are the circumstances of payment to the consultants. The Agreement was signed on Jan. 21, 2015, with retrospective effect from Jan. 01, 2015.

• Willie-Harry, a community activist, lives in Port Harcourt.

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