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By Queen Onwughalu
The innovations and reforms undertaken at Federal Inland Revenue Service (FIRS) by the new tax master, Muhammad Nami, call for a closer look.
Since the discovery of oil in Nigeria in 1956, the nation has continued to rely more and more on oil revenue as its economic mainstay. Until recently, when oil prices in the international market fell into a glut, internally generated revenue (IGR) has not been given the attention that it deserves as the major augmenter to the nation’s revenue base.
The need for alternative revenue sources has been a growing concern over the years, leading to the much talked about diversification of the economy. Taxation as one of these measures is primarily to assist the nation’s economy and like in other countries, imposed to generate revenue for the government to meet its capital and recurrent expenditure.
With the dwindling oil revenue, internally generated revenue has become a great concern and successive governments in Nigeria have made conscious efforts to reposition the Federal Inland Revenue Service (FIRS).
Thus in December 2019, President Muhammadu Buhari replaced Babatunde Fowler with Muhammad Nami as chairman of Federal Inland Revenue Service (FIRS). Mr. Muhammad M. Nami, is a well-trained Tax, Accounting and Management Professional with highly rated qualifications and professional practice spanning many professional bodies.
Nami has almost three decades of practical working experience in Auditing, Tax Management and Advisory and Management Services to clients in Banking, Manufacturing Services, Public Sector and Non-Profit organizations.
There is therefore no doubt that his appointment as chairman of the Federal Inland Revenue Service (FIRS) is one round peg in a round hole. And he has been on top of the daunting challenges of the sector. Nami understands clearly that revenue collection in Nigeria faces some formidable problems, which include the high tax rates and complex filing procedures, multiple taxation and lack of proper enlightenment, lack of statistical data, poor tax administration, and inability to prioritize tax effort, multiplicity of taxes and increase in underground economy.
Taxation is a main source of revenue to governments across the world; thus tax becomes a burden that every citizen must bear to support the government just as the government has some functions to perform for the well-being of those it governs. Tax is therefore a compulsory contribution from a citizen to the government to defray the expenses incurred in the common interest of all, without reference to special benefit conferred.
Though it is anticipated that tax being a contribution to settle the cost incurred by the government, the state uses the revenue collected from the taxes to provide good and social services such as hospital, school, public utility service and so on, which benefit all the people. This is a basic social contract, which the state must fulfill to continue to justify its demand for tax compliance from citizens.
Despite its necessity, Nigerians generally do not pay tax, making its collection as revenue generation an uphill task. Nami and team have been improving the prospects of rax collection and administration. FIRS under him have improved so much on Tax compliance strategy meant to elicit voluntary tax compliance.
The FIRS under Nami has demonstrated good intention and has secured the understanding of Nigerians that tax is inevitable and an indication of being a good citizen.
Companies, small, medium and big, have been made to keep proper and complete records of their business transactions to make way for proper evaluation and for the FIRS to be objective in their assessment to avoid taking excess tax from the taxpayer.
FIRS under Nami is particularly dealing with Corruption risk-mitigating issues to ensure efficient service delivery by putting in place and enforcing Code of Conduct for staff, Internal Control that have shown zero tolerance for corruption and having in place sanctions and incentives, whistleblowing and its protection as well as regulation against corrupt practices.
Nami as a new broom that sweeps clean was tested and confirmed within his first year in office, in 2020, when the Coronavirus pandemic struck. Economies across the world were battered and most countries suffered fiscal shocks.
Revenue authorities could not shore up enough funds to meet the needs of the government to execute their mandates. Despite the fiscal chaos, the FIRS under Nami was able to meet 98% of the national tax target for that year.
It collected total tax revenue of over N4.952 trillion, a little short of the target of N5.07 trillion the federal government had set for it. This near 100 per cent feat was prodigious. It was coming in the same year the pandemic had shrunk business activities round the world, provoked lockdowns and frustrated commerce.
FIRS under Nami had to grant tax exemptions to small companies to cushion the effects of the pandemic. In the same year too, the Service under Nami achieved 109 per cent of its non-oil tax collection target. In the first quarter of 2020 alone, stamp duty earnings jumped to over N66 billion from the N18 billion recorded the previous year.
Nami’s achievements as the helmsman of FIRS are legion but two or three of such outstanding achievements deserve some special mention. Apart from building institutional frameworks to collaborate better with stakeholders and make FIRS a customer-friendly institution and data-driven, Nami has deployed the revolutionary TaxPro Max: FIRS’ homegrown digital platform for tax administration, which allows taxpayers to register, file returns and pay their taxes easily from any location.
FIRS under Nami has also set up the Tax Incentive Management Department to monitor and take charge of the tax affairs of enterprises enjoying tax exemptions and holidays and ensuring they do not take undue advantage of their status as a cover to earn taxable income and refuse to pay taxes on such income. Nami also set up the Intelligence, Strategic Data Mining and Analysis Department of the FIRS.
This department mines data and analyses it to make sense of what is happening across the country and the world for more efficient tax administration. The Service has deployed a digital service interface, the Digital Economic Compliance (DEC) Tool, to facilitate the implementation.
The implementation of the DEC Tools also assists the Service in determining entities that fall within the SEP threshold and relevant turnover generated from Nigeria was revolutionary in itself.
Reward for good work, they say, is more work. Nami’s giant strides as a tax master have been recognized globally. On Friday, November 12, 2021, there was a buzz among tax aficionados because Muhammad Nami, the Federal Inland Revenue Service (FIRS) boss had been elected President of the Commonwealth Association of Tax Administrators (CATA). He is the first Nigerian in the history of CATA to occupy that position.
CATA is an association constituted at the meeting of the Commonwealth Finance Ministers in Barbados in 1977 to promote the improvement of tax administration within the Commonwealth with particular interest in developing countries. In 1978, 26 countries, including Nigeria formed CATA and the membership has grown to 47 today.
When Nami assumed office, four items were top on his agenda for the Commonwealth Association of Tax Administrators: improve the capacity of members to meet up with the dynamics of today especially in technological advancements; promote the Multilateral Commonwealth income Tax Relief for all member countries; promote the Bilateral Avoidance of Double Taxation Treaty among member countries; and forge strategic partnerships with developmental and multilateral institutions, for support in capacity building for CATA members.
Nami is aware that the emerging fourth disruption in the world economy is the ICT revolution, which has engendered digitization and digitization.
Nami understands this and has completely transformed and repositioned FIRS to lead the nation into it. Other components of the nation’s economy need to emulate the revolution, which has taken place in the Federal Inland Revenue Service.
Nami has not hidden his goal of making the FIRS a 100 per cent automation tax administration institution.
Apart from shoring up revenue, full automation of all its tax administration processes will block revenue leakages thereby revolutionizing revenue generation in Nigeria. Nami has also called for the cooperation of Nigerians to achieve this and see tax evasion as a crime and economic sabotage.
Nami’s landmark achievements did not come to those who know him and his background as a surprise. As a man tailor-made for the job, he is an expert in rendering advisory support services to investors in respect of new businesses, trading, service, manufacturing and other sectors of the economy.
The Bayero University and Ahmadu Bello University product, Mr. Muhammad Nami is also a Fellow of the Chartered Institute of Taxation of Nigeria (CITN), the Chartered Institute of Forensic and Investigation Professionals of Nigeria, the Institute of Debt Recovery Practitioners of Nigeria and an Associate Member of the Nigerian Institute of Management (Chartered) and the Association of National Accountants of Nigeria (ANAN).
He began his career with PKF Professional Services in 1993 and rose to the position of a Senior Consultant in charge of Tax management and Advisory services.
He was also the Managing Consultant of Manam Professional Services (Chartered Tax Practices and Advisers) based in Kaduna, Abuja and Minna from October, 2018 to December, 2019 when he was appointed as FIRS boss. Mr. Nami also served on many companies’ Board and Statutory Board Audit Committees.
He was appointed as a member, Presidential Committee on Audit of Recovered Stolen Assets in November, 2017 by President Muhammadu Buhari. In addition, Mr. Nami is also the Chairman, Joint Tax Board (JTB) and Chairman of African Tax Administrators Forum (ATAF). These added feathers confer on him the enviable responsibility of contributing to the economic growth and development of Africa’s largest country, Nigeria.
Also he created Emerging and Special Tax Department to cover areas such as emerging tax matter like crypto currency, e-commerce , Social media platform like Twitter, Instagram, face book that do not usually have presence.
2) He created Special Crimes Department which came into being this year with the mandate to prosecute tax criminals or reduce to the barest minimum tax crimes in the country with powers of Nigeria Police Force and other law Enforcement Agencies . The staff have been designated as Special
Purpose Tax Officers with powers to detain and prosecute etc.
Nigerians have to reciprocate the great job being done by Nami and FIRS by committing to meeting tax obligations while the government should be more serious in the discharge of its responsibilities to the governed in fulfillment of the said social contract. Tax evasion and corruption must be seen as social and economic cankerworms by the citizens. Public offices and good things of life must be shut to tax evaders and corrupt citizens. Good taxpayers and honest citizens must be adequately rewarded through good governance and constant improvements in the standard of living of citizens.