Bobrisky and tax reforms in Nigeria

 

By

abiodun KOMOLAFE

Bobrisky

The  charade of Nigeria is never-ending! Only recently, one of Nigeria’s best-known cross-dressers, Idris Okuneye, alias Bobrisky, was arrested on charges of abusing banknotes. He was later convicted and sentenced to six months in prison. Not long after, popular socialite, Pascal Okechukwu, aka Cubana Chief Priest, was also arrested for alleged naira abuse and he’s already being prosecuted. Nigerians wait to see how events unfold!

In the considered opinion of this writer, jailing Bobrisky is, to say the least, amusing! It’s too pedestrian! As things stand, Nigeria’s revenue target reportedly stands at N18 trillion. Of course, that’s pathetic! Where things work, the target should be nothing less than N50 trillion. So, the country needs revenue, certainly not by Nollywood sideshows but by passing an Unexplained Source of Income Act.

For God’s sake, why pick Bobrisky and what does the Economic and Financial Crimes Commission ((EFCC) want from him? Well, if the arrest was to teach the self-styled cross-dresser some lessons of life, then, that’s a different story. Otherwise, it was a mere distraction and whoever mooted the ideas in the first place did not deserve our claps.

If we are talking about the debasement of the naira and what ought not, what the EFCC needs is not whether people spray money or not. Yes, Bobrisky was spraying naira! But what happens next? In other climes, Bobrisky would never be banned for disdainfully soothing his ego. In countries like the United Kingdom and Sweden for example, if one goes to an ‘Owambe’ party and spices it up recklessly with pounds or euros, that’s one’s business! If one even likes, one can invite King Sunny Ade and ‘Professor Master General’ Kollington Ayinla to England to treat one’s audience to the melodious tunes of ‘Ijo Yoyo’. Nobody cares! But the consequence is that a tax bill awaits one immediately the party is over! In other words, what the government does is to invoke the Unexplained Wealth Orders (UWOs) 2017. By implication, the Nigerian government doesn’t need to pass a law restraining the people from ‘spraying’ naira notes. It only needs to ask some pertinent questions relating to the defaulter’s sources of wealth vis-à-vis his or her tax returns. Unfortunately, Nigeria’s government agencies are either too lazy or are not sincerely interested in generating revenue for the government.

If we are serious about fighting corruption in Nigeria, what we need is not some showboating. Nigeria doesn’t have to reinvent the wheel! So, instead of running round and round in circles, wasting so much time doing nothing, what’s needed is a surgical operation on the economy. The real issue is that Nigerians are not paying taxes and that’s why they are always ‘spraying’ money rashly. If we have the Unexplained Source of Income Act in Nigeria, which we ought to have had about 30 or 40 years ago, no Bob would have attempted to risk his waist on our naira notes because he perfectly understood the consequences. 

This brings us to another sideshow a la Yahaya Bello! The fact that the immediate past governor of Kogi State is evading arrest from lawful authorities is symptomatic of a country without functional laws; and that’s unacceptable! It is because it has happened and nothing ever happened thereafter that it is now happening, because nothing will eventually happen! After all, once upon a time in Nigeria’s chequered history, one Nyesom Wike shielded one Rotimi Amaechi from lawful arrest and nothing happened! So, what’s the big deal? Could we have contemplated the former Governor of Wisconsin in the USA evading arrest? Even former President Donald Trump submitted himself to investigation and he’s currently having his day in court. So, who is Yahaya Bello and what’s special about the ‘ta-ta-ta-ta’ inventor? Shouldn’t Nigeria, at least, for once, be spared of pantomimes fooling around?

Remember Alphonse Gabriel Capone, aka Scarface, the American gangster, businessman and boss of the ‘Chicago Outfit’! Remember also Eliot Ness, the brilliant, incorruptible American Prohibition agent and leader of ‘The Untouchables’! In his time, Capone killed a lot of people, including the Saint Valentine’s Day Massacre, but he didn’t leave any trace that could lead to his arrest for murder. He was also making millions of dollars without declaring tax returns. On Ness’s advice, Capone’s accountant was dragged into the case. On October 18, 1931, Capone was convicted after trial and jailed for income tax evasion, not murder, on November 24, 1931.

The heart of the matter is that these are tax issues! So, the Federal Inland Revenue Service (FIRS) should have asked Bello the sources of his wealth vis-à-vis his tax returns. Pure and simple! In sane climes, the EFCC itself should be nothing more than a desk in the police force, just like the Fraud Office in England; and Nigeria would have been spared the rigour of the creation and duplication of the functions in the Ministries, Departments and Agencies. As a matter of fact, the Fraud Office operatives are more technically competent than the EFCC can ever be!

At a time like this, it’s better Nigeria faces the real issue; and the real issue is that super-rich Nigerians have not been paying taxes. Let’s face it, the day Nigeria gets serious, she will catch up with the developed nations within 15 years. For instance, the EFCC is accusing Bobrisky and Cubana of naira debasement, there are lots of wedding activities across the country, even as we speak. Has the EFCC prepared its operatives for the onerous task of even arresting prospective naira abusers? Has the Commission ever asked how some Nigerians get brand new, untouched notes while those who run legitimate accounts are starved of even the old ones? If one may also ask, how do our Point of Sale (PoS) system operators source the wares for their ventures?

 President Bola Tinubu is the head of the government. Again, this where he has to act before things get out of hand! If he truly wants to reform the country, this is the time to do so. But if he wants business to continue as usual, then good luck to him and good luck to Nigeria! So far, so good, a lot of his policies are right and are on the right path! Definitely, the criminal subsidy removal is painful; he should have thought about it better and come up with better ideas about how to mitigate its effects! The merging of the foreign exchange rates was also traumatizing. But it should be applauded! At least, the naira is now coming down and the speculators now know how far they can go! Going forward, let Tinubu go the whole hog! From the look of things, Nigeria is a one-party state, as most of the National Assembly members are from the ruling All Progressives Congress (APC), which makes his job easier. Therefore, let the president lobby the National Assembly to enact the Unexplained Source of Income Bill, modeled on the UWOs which was introduced into the United Kingdom legislation under the 201 Criminal Finances Act. 

Except we want to be economical with the truth, tax evasion is feasible when the system allows for it! All the more reason Tinubu should empower the FIRS by making it the pivotal figure in revenue generation. Those who earn more should pay more and the charade of over-taxing the poor to pay the rich should come to an end. With the passage of the Unexplained Source of Income Act, the government will generate more revenue, especially from those who are currently evading taxes. It is really annoying that Nigeria keeps taxing the poor while ‘blessing’ the rich with tax holidays.

May the Lamb of God, who takes away the sin of the world, grant us peace in Nigeria!

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Source: The Nation

NIGERIA: States Govt, Not FG Should Collect VAT, Related Taxes, Court Rules

In a landmark ruling, the Federal High Court sitting in Port Harcourt, Rivers State, has declared that the Rivers State Government and not the Federal Inland Revenue Services (FIRS), an agency of the federal government, should collect Valued Added Tax (VAT) and Personal Income Tax (PIT) in the state.

Presided over by Justice Stephen Dalyop Pam, the court also issued an order of perpetual injunction restraining the FIRS and the Attorney General of the federation, both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay to FIRS, personnel income tax and Value Added Tax.

Justice Pam made the assertion while delivering judgement in Suit No. FHC/PH/CS/149/2020, filed by the Attorney General for Rivers State (plaintiff), against the Federal Inland Revenue Service (first defendant) and the Attorney General of the Federation (second defendant).

The Court, which granted all the eleven reliefs sought by the Rivers State Government, stated that there was no constitutional basis for the FIRS to demand for and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other State of the Federation, being that the constitutional powers and competence of the federal government was limited to taxation of incomes, profits and capital gains, which did not include VAT or any other species of sales, or levy other than those specifically mentioned in items 58 and 59 of the Exclusive Legislative List of the Constitution.

The judge dismissed the preliminary objections filed by the defendants that the Court lacked jurisdiction to hear the suit and that the case should be transferred to Court of Appeal for interpretation.

Justice Pam, who also dismissed objection raised by the defendants that the National Assembly ought to have been made a party in the suit, declared that the issues of taxes raised by the state government were issues of law that the court was constitutionally empowered to entertain

He declared that after a diligent review of the issues raised by both the plaintiff and the defendants, the plaintiff has proven beyond doubt that it was entitled to all the eleven reliefs it sought in the suit.

The court agreed with the Rivers State Government that it was the State and not FIRS that was constitutionally entitled to impose taxes enforceable or collectable in its territory of the nature of consumption or sales tax, VAT, education and other taxes or levies, other than the taxes and duties specifically reserved for the federal government by items 58 and 59 of Part 1 of the Second Schedule of the 1999 constitution as amended.

Also, the court declared that the defendants were not constitutionally entitled to charge or impose levies, charges or rates (under any guise or by whatever name called) on the residents of Rivers State and indeed any state of the federation.

Among the reliefs sought by the Rivers State Government, was a declaration that the constitutional power of the federal government to impose taxes and duties was only limited to the items listed in items 58 and 59 of Part 1 of the second schedule of the 1999 constitution as amended.

The Rivers State Government had also urged the court to declare that, by virtue of the provisions of items 7 and 8 of the Part II (Concurrent Legislative List) of the Second Schedule of the constitution, the power of the federal government to delegate the collection of taxes can only be exercised by the State government or other authority of the state and no other person.

The State government had further asked the court to declare that all statutory provisions made or purportedly made in the exercise of the legislative powers of the federal government, which contained provisions that were inconsistent with or in excess of the powers to impose tax and duties, as prescribed by items 58 and 59 of the Part I of the Second Schedule of the 1999 constitution, or inconsistent with the power to delegate the duty of collection of taxes, as contained in items 7 and 8 of Part II of the Second Schedule of the Constitution, were unconstitutional, null and void.

Lead counsel for the Rivers State Government, Donald Chika Denwigwe (SAN), who spoke to journalists after the court session, explained that the case was all about the interpretation of the constitution as regards the authority of the government at the state and federal levels to collect certain revenue particularly, VAT.

“So, during the determination of the matter, some issues of law were thrown up like, whether or not the case should be referred to the Court of Appeal for the determination of some issues.

“The court noted that the application is like asking the Federal High Court to transfer the entire case to the Court of Appeal. In which case, if the court so decides, there will be nothing left to refer back to the Federal High Court as required by the constitution.”

According to Denwigwe, the court refused that prayer and decided that the case was in its proper place before the Federal High Court and to determine it.

Donald Chika Denwigwe, SAN, lead counsel to Government of Rivers State and Ken C.O. Njemanze, SAN, briefing journalists after the Federal High Court in Port Harcourt on Monday declared FIRS collection of Value Added Tax in Rivers State unconstitutional.

On the implication of the judgement, Denwigwe said it was now, unlawful for such taxes as VAT in Rivers State to be collected by any agency of the federal government.

“In a summary, it is a determination that it is wrong for the federal government to be collecting taxes, which are constitutionally reserved for the state governments to collect. The implication of the judgement is that the government (federal and state) as an authority under the constitution, should be advised by the judgement, that it is the duty of all government authorities to comply with and obey the law so long as the court has interpreted it and said what that law is.

U“So, in other words, the issue of Value Added Tax (VAT) in the territory of Rivers State and Personal Income Tax should be reserved for the government of Rivers State.”

Counsel to FIRS, O.C. Eyibo said he would study the judgment and advise his client.

By Mike Odiegwu, Port Harcourt.

EFCC To Collaborate With KADIRS in Blocking Tax Leakages

The Executive Chairman of the Economic and Financial Crimes Commission EFCC, Abdulrasheed Bawa on Tuesday, August 10, 2021 promised to collaborate and partner with the Kaduna State Internal Revenue Services, KADIRS in the areas of information gathering and sharing to block leakages in taxation and ensure prompt payment of tax in the state.

The EFCC boss gave the assurance when a delegation from KADIRS led by its Executive Chairman, Dr. Zaid Abubakar paid him a courtesy visit at the Commission’s headquarters, Jabi, Abuja.

The EFCC boss stressed the need for partnership and collaboration which he said is one of the core mandates of the Commission, and will work with KADIRS to achieve its objectives. “Here in the EFCC, issues of partnership are one of our core values. We are by law empowered to collaborate with agencies within and outside the country for the main purpose of seeing that economic and financial crimes are curtailed in this country. I want to assure you that we are willing to partner with your organization to ensure that those that are expected to pay their taxes are paying their taxes as and when due; and for the collaboration that you said that you have been having with the EFCC, I want to assure you that we are going to sustain it.”

In his remarks, Executive Chairman of KADIRS, Dr. Zaid Abubakar said they were at the EFCC to seek ways of collaboration in the areas of information and data gathering and in other areas the EFCC can assist. “We are also faced with the use of data gathering which, as earlier it was EFCC we relied upon to get whatever data we are able to use. We saw the need for us to push further instead of just limiting ourselves to the zonal office, we saw the need for us to escalates issues and come specially to meet the Executive Chairman, first to show our appreciation over what happened in the last twelve months, the successes we recorded because of the partnership and also to ask further on other areas that he feels he can assist going by the provision of the law, because we are not going to ask for anything outside the mandate of EFCC,” he said.

Bawa enjoined the KADIRS to take advantage of the Tax Fraud Section in the Kaduna Zonal Command to improve its activities and bring more tax payers into the tax net.