The appointment of Babatunde Fowler as the Acting Executive Chairman, Federal Inland Revenue Service (FIRS), was described by stakeholders as a square peg in a square hole. For a man who moved the Lagos State revenue base from N3.6 billion monthly in January 2006, to over N20.5 billion per month in 2013, that could stand for an understatement.
Lagos State Government was generating a monthly revenue of N600 million before the Lagos State Board of Internal Revenue was set up in 2005 during the Bola Ahmed Tinubu administration with Fowler named the Chief Executive Officer/Executive Chairman.
The Lagos monthly Internally Generated Revenue (IGR) has since progressed to N23 billion presently, making the state less dependent on proceeds from the Federation Account.
“The new change of leadership at FIRS is predicated on the resolve of the Presidency to ensure maximum increase in tax revenue as the era of absolute dependence on oil proceeds was over,” Fowler said a few days after he took office.
But with government revenues dropping over the continued decline in crude oil prices, which account for over 75 per cent of export earnings, keeping its promises to the people would require improved cash flow. Nigeria’s crude oil bonny light, which traded at $110.2 per barrel in January 2014, reaching $114.6 per barrel by June that year, is now trading below $40 per barrel.
The new tax chief believes the antidote to the current revenue slide from oil was for the FIRS to raise revenue accruing from tax collection to record highs to fully fund and implement government developmental programmes.
Fowler understands that turning the revenue tide around would require partnership with relevant stakeholders to boost tax revenue and improve tax administration in the country. The FIRS under him would take the lead in tax revenue collection and be ready to share information and ideas with the States Board of Internal Revenue (SBIR) to achieve the desired result.
But such would require all stakeholders, within and outside the tax system, building a synergy that allows healthy exchange of information between FIRS and SBIR.
Fowler said his vision and mission in FIRS is neither to alter the existing management organogram structure nor lay off management staff from their duty posts, but to take the FIRS and the nation’s tax system to an enviable height.
There are ample reasons to believe that he will fly in this new assignment. Firstly, under him, the Lagos State tax machinery was systemically overhauled to make room for greater efficiency by developing a finance model that moved its IGR in geometric progression.
Machineries like the Lagos State Traffic Management Authority (LASTMA); State Universal Basic Education Board (SUBEB), creation of more jobs for residents and devising new tax payment mechanisms helped achieve that feat. The autonomy and increased efficiency of the Lagos Inland Revenue Service (LIRS) was also strategic to the success.
Besides, the massive enlightenment campaigns to inculcate the tax culture, widening of the tax net, especially to include the informer sector and small businesses which were formerly outside the Pay-As-You- Earn (PAYE), Withholding Tax Schemes and blocking of leakages using direct bank lodgments into state government accounts have made the Lagos increase in revenue under him possible. The LIRS usually set itself a monthly IGR target which was surpassed by bringing more people into the tax net.
Since 75 per cent of the government’s IGR comes from tax, LIRS under Fowler pursued the strategic objective of widening the tax net through the simplification of the tax assessment and payment procedure; expansion of official presence in major markets, sustenance of a massive public enlightenment campaign, enforcement of statutory provisions and massive job creation.
Moreover, tax consultants advised the state on how best to improve on internal revenue of the previous administration. Besides, every tax paying adult is required to obtain an e-payment card, while the Lagos State government also involved private companies in the collection of its numerous levies and taxes.
There is also input from real estate sector where infrastructural development charge, harmonized land charges, stamp duty fees, registration of titles, property search, acquisition of certificate of occupancy and approved building plan have made LIRS double targeted revenue in that segment.
Although there were multiple taxation criticisms especially in the hospitality industry during Fowler’s term in Lagos State, observers believe the Lagos tax system is not only effective but rewarding.
Fowler had his higher education in the United States where he obtained a Bachelor’s degree in Economics from the University of Wisconsin and a Master of Business Administration degree from the California State University. Before joining the service of the Lagos State Government, he worked in the banking sector for about 20 years with long stints at Credit Lyonnais Nigeria Limited and Chartered Bank.
He holds an Honorary Doctorate Degree of the Irish International University and is a Fellow of the Chartered Institute of Taxation of Nigeria and the Business Management Association of the United Kingdom.
Fowler’s achievements in Lagos State are what Nigerians want him to replicate at the federal level even as he awaits the Senate to confirm his appointment.
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