…as Nasarawa revenue board launches tax code
Governor Abdullahi Sule of Nasarawa State has commended the tax reforms embarked upon by President Bola Ahmed Tinubu but insisted that Northern governors are only against the removal of Value Added Tax (VAT) from the federation allocation.
Governor Sule stated this while formally launching an innovative tax digital codes initiated by the Nasarawa State Board of Internal Revenue Services (NSBIRS) at the Government House on Wednesday.
While commending the President for doing everything possible to reform the country’s economy, particularly the tax reforms, the Governor re-echoed the position of his Northern colleagues, as well as that of the National Economic Council (NEC) by calling for a review of the tax reform.
“Let me make it categorically clear, we are not against the tax reforms. There are so many good things about the tax reforms that Mr. President is putting forward. We just selected an item out of the tax reforms. It is the VAT that we are talking about, which would be taken out of the FAAC. That is why we are calling for a review of that position. The moment you take VAT out of FAAC, you are taking 60 percent of that to go to derivation. Other people are introducing consumption.
“For people like us, who once as a managing director of some of the biggest companies, I was the one paying VAT. I was the one paying taxes, and I knew how it was paid. I know where some of these goods are consumed. If you now turn around and say, it’s now at the point of consumption, then I can even educate somebody for a whole day about consumption. Because people don’t even understand the issue of consumption.
“A typical example I can give you from two industries that I have worked as CEO. As MD of African Petroleum, I had a customer from Maiduguri who would order 200 trucks, and he would pay me for 200 trucks. If you say you are going to go by consumption, you are going to charge the VAT of the 200 trucks to Maiduguri. But in reality, at the point of distribution, he would now tell me to bring only 10 trucks to Maiduguri. The rest of that, he is going to start distributing them from Ilorin all the way to Sokoto. This will make it difficult for you to understand consumption. If you say it is at the point of derivation, then all the corporate headquarters that collected for the 200 trucks are in Lagos. Which means I pay in Lagos. Whichever way you pick, you are going into default,” he stated.
He therefore insisted on a review of that segment of the tax reforms before attempting to pass it into law, as anything short of that would put the entire Northern region at a disadvantage.
Governor Sule commended the Executive Chairman of the state’s internal revenue board, Alhaji Ahmed Yakubu Mohammed, his team and consultants for introducing a digital innovation, the USSD tax code to facilitate revenue collection from the informal sector of the economy of the state.
He pointed out that the informal sector is one of the most difficult areas to generate revenue.
“It is like that everywhere around the world. It is not just in Nigeria. And it is not just in Nasarawa State. Informal sector is very difficult, but it is also a sector that provides one of the biggest revenue sources. We must be able to utilize that,” he said.
The Governor said however that economies are not grown through taxes but through productivity and manufacturing.
“I have always said that we do not grow economy through taxes. It is not by improving our taxes that will help us grow our economy. We grow the economy through productivity, manufacturing, and the rest of that. However, we must work very hard to ensure that we block some of the leakages. Some of these poor payers of this revenue in the informal sector do pay. It’s just that after paying, the resources do not get to where they are supposed to get,” he added.
He commended the board on the initiative and for introducing the new tax code.
“By you coming out with a new code, we are definitely going to use the opportunity to plug the holes. I am urging everyone through the chairmen of various sources to ensure that we utilize the code. Nobody should go outside the code. We must be sure that we utilize the code to the benefit of every one of us,” he stated.
Earlier, while introducing the new tax innovation, Executive Chairman of the board, Alhaji Ahmed Yakubu Mohammed said the unique identifier 8011047# will eliminate manual receipts thereby blocking the lapses making it difficult for the board to collect revenue from the informal sector.
Mohammed decried the challenges of collecting revenue from the informal sector, stressing that the board has in the past tried several options in order to meet its revenue generation in those areas having to do with the lower stratum of the society from the Keke riders, Okada riders, market women etc.
“Today we are here because we have decided to come up with a USSD code that can be used by anybody, even with a torchlight phone you can use it to pay your tax to Nasarawa State.
“We have a code that we have gotten approval from the NCC. They have given us the approval and we have that code which is 8011047#. If you click on that code it will give you the Nasarawa e-ticket,” he said.
The Nasarawa internal revenue czar explained that the Nasarawa e-ticket leads to various platforms that a taxpayer can utilize to pay tax from various sectors such as markets, transport, land and other payments.
He further stressed the important role the innovation would play in sanitizing revenue collection from the informal sector.
“This e-ticket that we are introducing will eliminate manual receipt. That is why we have come to you to launch this USSD code for Nasarawa State so that we can reach the target that you set for us and ensure that we generate more revenue for the state so that you can meet the aspirations and promises that you made for the people of Nasarawa State,” he said.
Mohammed used the opportunity of the event to show appreciation to the Governor for all he has been doing to support the board.
“I want to say unequivocally His Excellency has never interfered for once in what we do at the board of internal revenue. Whatever demand we have made he has never for once said no to it. We have no reason to fail you. We promise you we will do the best that we can to ensure we generate more revenue for Nasarawa State so that you can meet the yearning of the people of the state,” he added.