President Muhammadu Buhari may
have left the immediate past chairman of the Federal Inland Revenue Service,
Tunde Fowler, shocked with the replacement Monday of the revenue chief.
Mr Fowler on Monday wrote to the
Secretary to the Government of the Federation, Boss Mustapha, asking to be
allowed to continue his work at the helm of the FIRS to “consolidate and build
on the achievements” which he highlighted in an attachment to his letter.
Mr Fowler’s letter was dated
December 9, the expiration date of his tenure. Rather than grant Mr Fowler’s
request, however, President Buhari hours later announced the appointment of
Muhammad Nami as the new chief executive of the FIRS, thereby discharging Mr
Fowler.
Mr Nami’s appointment is subject
to the approval of the Senate.
A graduate of Bayero University,
Kano, Mr Nami was appointed as a member, Presidential Committee on Audit of
Recovered Stolen Assets in November 2017 by Mr Buhari.
After his removal, on Monday, Mr
Fowler accepted his fate and thanked the president. “There is nothing automatic
about having a second term,” the former tax chief told his former colleagues,
according to a statement by Wahab Gbadamosi, the FIRS spokesperson.
The thought of a non-automatic
second term did not, however, deter Mr Fowler from requesting one.
The Request
In his letter seeking the renewal
of his appointment, Mr Fowler highlighted that his tenure was coming to an end
but he wanted an extension.
“I write to notify the Secretary
to the Government of the Federation that my first tenure as the Executive
Chairman of the Federal Inland Service (FIRS) ends today 9th December 2019,”
wrote Mr Fowler in his letter to Mr Mustapha.
“In view of the above, I wish to
present myself for reappointment for a second term. This is consistent with the
provisions of the FIRS Establishment Act 2007 and would grant me the
opportunity to consolidate and build on the achievements we have recorded in
the past four years,” he wrote.
It is not clear why Mr Fowler
waited till his last day in office to write the letter. The spokesperson for
the FIRS simply said “that was his remit” when asked why Mr Fowler waited till
his last day in office to write the request.
However, months before Mr
Fowler’s request for reappointment, his fate appeared to have been sealed
following an exchange of letters he had with the powerful Chief of Staff to
President Buhari, Abba Kyari.
Query
In August, the presidency, in a a
letter signed by Mr Kyari, had queried Mr Fowler over worsening tax collection
since 2015.
“We have observed significant
variances between the budgeted collections and actual collections for the
period 2015 to 2018,” read Mr Kyari’s letter stamp-dated August 8, 2019.
Checks showed that since 2015,
the FIRS under Mr Fowler has not been able to meet collection targets, a different
trend from the preceding years.
In 2015, FIRS set N4.7 trillion
target but was only able to make N3.7 trillion in the actual collection.
In 2016, 2017 and 2018, the
target collections were N4.2 trillion, N4.8 trillion and N6.7 trillion but the
actual collections were N3.3 trillion, N4.0 trillion and N5.3 trillion,
respectively.
Worried by the variances, the
presidency asked Mr Fowler for an explanation.
“Accordingly, you are kindly
invited to submit a comprehensive variance analysis explaining the reasons for
the variances between the budgeted collections and actual collections for each
main tax item for each of the years 2015 to 2018,” Mr Kyari wrote.
Analysis of Nigeria’s tax
statistics showed that before Mr Buhari and Mr Fowler came in 2015, the only
year FIRS could not meet its collection target was 2006 since the year 2000.
But in the query served Mr
Fowler, the presidency only mentioned 2012 to 2014.
“Further we have observed that
actual collections for the period between 2015 and 2017 were significantly
worse than what was collected between 2012 and 2014,” stated Mr Kyari.
“Accordingly, you are kindly invited to explain the reasons for the poor
collections.”
The query to Mr Fowler came weeks
after an anti-corruption agency, EFCC, detained top officials of the FIRS for
several days as part of a corruption investigation.
That investigation is still
ongoing by the EFCC.
All facts not considered
In his reply, Mr Fowler,
suggested that the query served him did not reflect all the facts.
While he agreed that actual tax
collection since the beginning of Mr Buhari’s administration is lower than the
2012-2014 period under former President Goodluck Jonathan, in general terms, he
told the presidency FIRS under him has performed better regarding specific
non-oil tax types, such as VAT and CIT.
He associated the general lower
collection since 2015 to oil market crisis which has seen a fall in commodity
price compared to the period under Mr Jonathan, and recession “which slowed
down economic activities.”
He said FIRS has control of
non-oil revenue collection, which “grew by N1,304.20 trillion or 21% between
the period 2016 to 2018,” unlike oil revenue collection which is “subject to
more external forces.”
He further explained that oil price
fall and low production caused the variances between the country’s target
collections and actual collections since the beginning of the present
administration.
“Notwithstanding government
efforts to diversify the economy; oil revenues remain an important component of
all revenues accruable to the Federation,” Mr Fowler said. “The crude oil price
fell from an average of $113.72, $110.98 and 100.40 per barrel in 2012, 2013
and 2014 to $52.65, $43.80 and $54.08 in 2015, 2016 and 2017.
“There was also a reduction in
crude oil production from 2.31 mbpd, 2.18 mbpd and 2.20 mbpd in 2012, 2013 and
2014 to 2.12 mbpd, 1.81 mbpd, and 1.88 mbpd in 2015, 2016 and 2017, respectively.”
He added that “a troubled economy
is associated with his tax collection performance”.
“The Nigerian economy also went
into recession in the second quarter of 2016 which slowed down the general
economic activities,” he said. “Tax revenue collection (CIT and VAT) being a
function of economic activities were negatively affected but actual collections
of the above two taxes were still higher in 2016 to 2018 than in 2012 to 2014,”
he said.
“During the years 2012, 2013 and
2014, GDP grew by 4.3%, 4.4% and 6.3%, while in 2015, 2016 and 2017, GDP grew
by 2.7%, -1.6% and 1.9%, respectively. The tax revenue grew as the economy
recovered in the second quarters of 2017.”
Checks by PremiumTimes shows that
between 2012 and 2014, CIT revenue was N2.9 trillion and N3.5 trillion between
2016 and 2018. Also, VAT between 2016 and 2018 was N2.9 trillion, higher than
N2.3 that was gained between 2012 and 2014.
Mr Fowler said the “strategies
and initiatives” adopted for the collection of VAT under him was responsible for
the increase over the 2012 to 2014 period.
“In 2012, the VAT collected was
N802 billion compared to N1.1 trillion in 2018,” he said. “This increase is
attributable to various initiatives such as ICT innovations, continuous
taxpayer education, taxpayer enlightenment, etc embarked upon by the Service.”
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