From generating about N12 billion in 2015 when the Malam Nasir El-Rufai administration assumed office, Kaduna State Internal Revenue Service (KADIRS) had raked in over N50 billion as Internally Generated Revenue (IGR) in 2020. Last year, it also surpassed its target as the Executive Chairman, Dr. ZAID ABUBAKAR explained in this interview. Abdallah Yusuf Abdallah reports:
Last year, Kaduna State Government projected an Internally Generated Revenue (IGR) of N51 billion but the management of Kaduna Internal Revenue Service (KADIRS) put its own target at N60 billion. Did you achieve last year’s target? Which of the targets did you achieve?
Last year, there was an estimate from the state government of N51 billion and the management of the service decided to jerk it up to around N60 billion. The whole idea was to see that we are able to realise a new target and even if we don’t meet the new target, we should fall in between the government target and the target set by the management. Yes, we were able to achieve and surpass the government target of more than N51 billion but we were not able to achieve the management’s target of N60 billion. That was because of a lot of setbacks here and there but we are not interested in talking about the setbacks now. The rallying point for us throughout the year was for us to reduce the setbacks for the forthcoming year. We were able to fix some of the setbacks to achieve the management target that we set for this year. So, we surpassed the state government’s target of N51 billion, and we recorded close to N53 billion for the year 2021.
Talking about the setbacks, there was shortfall of revenue generation of about 47.66% in January 2021, what was responsible for that shortfall and how did you meet up?
January last year, was it across the state?
Yes, across the state for that particular month.
Ok. Usually, at the beginning of every new year, businesses are not usually fully opened, so the collections tend to stagger over time. What we do is to carry out our own estimation on monthly basis but we expect the collections to level up throughout the year. In a particular month, we might have a collection that is higher than the normal average and in another month, we may have a collection that is lower than the normal average. It is up to us to be reviewing the collections month by month, to know when we are lagging behind, so that we will be able to catch up the following month. That has been the strategy over the years.
KADIRS has not been distraining business premises and offices, has shut down yielded results? Is there now voluntary tax payment across the state? Have you reviewed your strategy of closing down firms and companies to compel compliance?
Well, two things happened. The level of compliance has gone up to a certain level and we have also reviewed our strategy. The strategy of distraining some of those premises has never been our first option. Usually, we send notices and warnings before doing so. Right now, we have reviewed our strategy because of the level of business generally across the nation is low. Coupled with that, insecurity has grounded most business activities across the country and in the state. So, we reviewed a lot of our strategies in compelling tax payment. We intend to persuade taxpayers more now, unless where the persuasion tends not to give us the required result; that is when we get in and possibly invite the court or the judicial arm of government to get things done. But it is not as if we don’t introduce enforcement at the premises, we take it to be the last option because of the level of insecurity and level of economic downturn that we have.
After years of advocacy and reach out, do individuals now voluntarily come to pay their taxes?
Well, individuals that are more conscious of their civic responsibilities do that, but in most instances, we have to nudge them, we have to push them to declare, or also pay their taxes. Out of 10 individuals, four or five pay voluntarily but the remaining six, we have to push them to pay. So, the level of compliance is still that low. We need a lot of awareness, we need a lot of education, we need a lot of enforcement to compel the citizens to begin to settle their civic obligations.
Has the automation of your processes made people to visit your offices less frequently to either renew their drivers’ license because they do it from the comfort of their bedrooms, like you envisaged?
We have achieved the objective of having a full-fledged self-service platform where taxpayers can do most of their tax processes without having to visit any of our area revenue offices. We have been able to achieve that. Unless where taxpayers choose to visit any of our offices, that is when you see them in our area revenue offices. Taxpayers that are not tech-savvy are the ones you see in our area revenue offices but most of the taxpayers that are tech-savvy can access our services online – and it is even more convenient for them. They can make their payments online, with their cards, without having to go and queue in banks.
In fact, some of them have expressed their happiness with the new system that we have deployed and it’s working fine. And we want to move to the next level of the automation. We are about to launch a particular concept that we call Revenue Administration for the Future, because of the four-day working week policy that is being implemented by the state government. We can’t afford to miss three days without collecting money into the coffers. So, with the new concept which is called Revenue Administration for the Future, the services of the Kaduna State Internal Revenue Service can be accessible online 24 hours, seven days a week. This means that assessment, payment or any other thing that can be done physically, can be done online. That is where we want the service to move to. The aim is that within the three days that people would be at home relaxing, resting, they can do most of these transactions via interface with our platforms. So, that is where we want to be. We don’t want people to be giving excuses for not paying taxes or renewing their papers or licenses, by saying that Fridays is a work-free day and government offices are closed, so are Saturdays and Sundays. So, with this new system, everyone can access our services at weekends. We want to make our services accessible anytime, from anywhere and from any place.
Some of the federal government agencies that are domiciled in Kaduna State didn’t use to remit their Pay As You Earn Taxes to the state. What is the story now?
We have been working with the office of the Accountant General of the Federation and with the implementation of the Integrated Payroll and Personnel Information System (IPPIS), they do the necessary deductions at the office of the Accountant General and remit to the relevant tax offices. And for the agencies that are yet to be on board the IPPIS, we are working with them to collect their taxes directly.
About two years ago, you mooted the idea of a Development Levy, are you still finetuning the policy or has it been launched?
Well, it has been launched. When we mooted the idea of a Development Levy, there was no detailed enabling law to empower Kaduna State Internal Revenue Service (KADIRS) to do the collection at that time. So, we had to go through the process of legal review of the enabling act that would allow the service do the collection. The Kaduna State House of Assembly passed the law and the governor has assented to it. So, we had to take the law back, review it and see how we can implement it; that is what we have been doing in the last two years.
At the beginning of 2021, we announced that the collection of Development Levy will become effective but we couldn’t launch it then. So, we were only able to do that last month; we launched it and the government is now asking us to up the collection. But even before the launching, citizens of Kaduna state started paying to our account. When we opened the file, we saw a lot of money coming in. And taxpayers have been calling to express their happiness that the payment platforms were made so easy that they don’t need to go to banks to pay the levy. So, they can pay through their phones or by using either the SME short code or the WhatsApp enabled payment. We have a dedicated number, we have a platform where citizens can pay their N1,000 Development Levy. It is working. Taxpayers may also choose to visit the online platform for payment and if one is not that tech-savvy, he can go to the bank and deposit his N1,000 Development Levy. So, we have various platforms where taxpayers can make their payments and we are happy that the citizens have embraced them, they have accepted them and they are now doing most of the advocacy for the levy.
Is the payment of Development Levy only for people in the informal sector or for all citizens of Kaduna state?
Yes, it is for all residents of Kaduna State, be they in the formal or informal sector.
But can the N1,000 levy be deducted at source for people in the formal sector?
That is what we are trying to do. We’ve established contacts with all the formal organisation in Kaduna State to see how they can deduct the levy from the monthly salaries of their employees and remit to the service. We’ve sent a lot of letters and we received a lot of positive responses.
IGR Facts
*In 2015, Kaduna State Government generated N11.7 billion as Internally Generated Revenue;
*The Malam Nasir El-Rufai administration appointed Ms Ifeuko Omoigui-Okaru, the ex-Chair of Federal Inland Revenue Service (FIIRS), to restructure Kaduna State Internal Revenue Service (KADIRS) in 2016;
*That year, the state generated N23 billion and in 2017, IGR increased to N26.5 billion;
*In 2018, KADIRS raked in N29 billion;
*However, in 2019, the service set for itself a target of N43 billion and it ensured that all its 28 tax revenue lines remained active and it collaborated with other agencies;
*The diligence and collaboration paid off as KADIRS collected a whooping N44 billion in 2019, surpassing its own target of N43 billion;
*In 2020, it targeted N50 billion as IGR and in spite of the Covid-19 pandemic, KADIRS still raked in N50.77 billion;
*Last year, KDSG projected an IGR of N51 billion but the management of KADIRS set a N60 billion target for itself;
*Although it didn’t meet its own target, it however surpassed the government’s target of N51 billion as the service raked in N53 billion.
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