Alhaji Abubakar Zaki Tambuwal is the Executive Chairman of Sokoto State Internal Revenue Service. He speaks in this interview on the activities of his office since he was appointed by Governor Ahmad Aliyu Sokoto in 2023 touching on the holistic strategy the Service has adopted which has led to drastic improvement in revenue generation of Sokoto state. Excerpts.
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QUESTION: Governor Ahmad Aliyu Sokoto appointed you and your team on August 22, 2023 making it a little over one year that you have been in charge. His clear and unambiguous mandate is for you to raise money for the execution of his 9- Point agenda to improve the lives of the people of Sokoto State. We will talk numbers… but my first straightforward question is have you met the mandate?
Answer: We were exactly one year in August having been appointed in August 23, 2023 by His Excellency Governor Ahmad Aliyu Sokoto and we remain eternally grateful to him for finding us worthy of delivering on this challenging assignment. And I must acknowledge the governor’s solid support in the discharge of our assignment, first through the judicious use of the taxes collected in execution of his 9-point Agenda and in the prompt funding of the service,because without funding us there is no way we can work. Revenue collection is expensive. The numerous projects the governor has embarked upon has helped the Service in the collection of taxes, because the people are finally seeing the benefits of paying their taxes. Governor Ahmad Aliyu Sokoto is our Chief Tax Collector. We are not where we want to be, but we are most certainly going to get there. We have a duty to support our performing governor. So my categorical answer to your question is a big yes! We intend to meet and in fact surpass the target.
QUESTION: At the Annual Conference of the Charted Institute of Taxation of Nigeria (CITN), the governor announced that your collection has increased from N2.6 billion to N3.8 billion quarterly under one year which means you are making progress. What is the game changer in terms of collection? And secondly, you have a target of N37 billion for 2024, what is your half year result looking like?
Answer: That’s a statement of fact and that’s an indication that the governor is happy with our efforts, but that’s also not to say we are going to rest on our oars. Our strategy is very simple and straight forward. First we have tried to understand our taxpayers and work in-line with the law establishing the Service which guided our collections. For instance in calculating the Pay As You Earn (PAYE) we insist on the correct application of the table. There are several other game changers …we have automated all our process and very critically blocked leakages and through enforcement and enlargement improved compliance rate. Our target for 2024 of N37billion is achievable. I am confident going by our performance in the first three quarters as at June 30th.
QUESTION: In 2021 the total collection was N23.7 billion made up of N15 billion in tax revenue and N8 billion in other taxes. What was the figure in 2023 even though you only assumed office in August?
Answer: In 2022 the collection was a paltry N18billion and this is understandable considering that it was an election year. And like you know we only assumed office eight months into the year. Meaning we had only about four months of last year to work.
QUESTION: The 2024 Budget of Hope and Resilience is N270 billion and Governor Ahmad Aliyu Sokoto is desirous on delivering on his 9- point agenda. Does this explain the aggressive tax drive that has led to some business premises being closed down due to their failure to pay their taxes? But was there a sensitization campaign to educate the taxpayers before you embarked on your exercise. And what is the update in terms of collection?
Answer: Taxpayers and stakeholders engagement is a daily routine activity. We are always engaging with the public on the various social media platforms, the media and physically. From the update that I got tax collection improved by 10% since the inception of the enforcement by the Service.
QUESTION: Which was your greatest challenge – is it the fact that Nigerians don’t like paying taxes or the lack of working tools?
Answer: The truth is people don’t like paying taxes. And this is not peculiar to Sokoto State or Nigeria. I am sure you have read about footballers like Messi who ran into tax problems with the Spanish government. The problems range from failure to file or filing false tax returns. Recently the son of the United States president pleaded guilty to misdemeanor charges for failing to pay his income tax. He would pay backlog and might face prison terms. So I can say that tax avoidance is long tradition which we would continue to face. Our duty is to continue to work tirelessly to reduce it. It’s part of our challenges to be sincere to you, but as I said we will continue addressing it day-in day-out through enlightenment programmes. And in our case the governor is helping us in our collection. There is no doubt that people seeing uses to which their money is being put has been helpful.
“The main purpose of taxation is to provide revenues for the government to enable it to deliver on its social contract with the citizens of Sokoto State, the construction of roads, building of schools, healthcare facilities and other infrastructural projects. And Governor Ahmad Aliyu Sokoto is certainly not asking for too much asking us to help generate the money to fund his pro-people projects.”
QUESTION: The governor is obviously happy with your performance because he is getting more money to execute various people oriented projects, but how supportive has he been?
Answer: Without hesitation I want to put on record Governor Ahmad Sokoto’s tremendous support for the Service. He has been extremely encouraging and challenging. This service last saw this during former Governor Aliyu Magatarkda Wamakko tenure. Since 2015 when His Excellency Sarkin Yamma left office, the Revenue Service was a shadow of itself with low morale and lacking in resources to collect revenue. Governor Ahmad Aliyu Sokoto has been supportive in meeting the human and material resources of the Revenue Service. The improvement in collection is because of the conducive working environment and the resources like motorcycles, technology and vehicles. How can a tax collector collect tax without the provision of the tools.
QUESTION: How has the Business Enabling Reforms Action Plans(BERAP)) and the State Action on Business Enabling Reforms (SABER) which aims at enhancing the ease of doing business and a favorable business environment helped in your Service in tax collection…if businesses thrive your collection would definitely improve?
Answer: The Governor being a financial expert understood from day one that tax collection is dependent on making Sokoto State an investment hub and that to achieve this he needed to provide the enabling environment for entrepreneurs to make money. We can’t make money if they don’t make money. So all these policies and programmes are geared towards the development of the economy of the state. For instance we need visitors to visit our state, the hotel owners will make money, so also would the tomatoes seller, the poultry farmers etc. Another area the governor has helped us in the payment of salary of the workers. Like you know PAYE is very reliable because it’s deducted from the source. …workers don’t give us stress.
QUESTION: The governor is obviously pro- business and is clearly in a hurry to develop the state economically….which is not surprising considering that he has a finance background. Considering the state’s economic development, which the governor is working hard to change. What other revenue sources have you explored and identified that can significantly help you generate more revenue?
Answer: Revenue collection is a law based activity which is why we can actually charge you to the tax tribunal for failure to pay and as when due. The law is standard…so taxpayers know what to pay, the tax exemption they are entitled to, the penalties for not paying as at when due. And, in providing us with truthful information for assessment purposes. In Sokoto State the Consolidation law did not only harmonize but captured all sources of revenue in the state for both the formal and informal sectors. We are focused on all the sectors, but like you know we have no problem with public servants because their taxes are collected at source…so our effort is presently focused on the informal sector where much needs to be done to bring in more people into the tax net.
QUESTION: Is presumptive tax on the table?
Answer: Yes it’s on the table; presumptive tax is under the informal sector which I just said now that we are going to seriously pay attention to. For the benefit of all Nigerians and not just the people of Sokoto state, presumptive tax simply means that there is a legal presumption that the taxpayer’s income can be taxed but where for all practical purposes the income can not be ascertained or because financial records are not kept to enable proper assessment.But you know, it’s a process, so we are engaging with all stakeholders and the unions to get their buy in …which is critical and a massive enlightenment programme to educate them. The other advantage is that it reduces tax compliance costs.
QUESTION: Clearly improving tax compliance among individuals and businesses is critical. So what are your programmes in terms of robust tax education campaigns, simplified tax payment processes, and strict enforcement of tax laws?
Answer: As I earlier said, we are always on social media, local media, and we have continued to organize physical sensitization programmes all in an effort to educate and sensitize our potential taxpayers. We have also developed and end-to-end system automation where all our operations have been simplified and can be accessed through self-service platforms.
QUESTION: So your Service has leveraged on technology to streamline revenue collection and management?
Answer: Technology has shown that it is relevant to every revenue collecting Service …they must not only acquire it, but must continue to update it to identify tax base, to monitor compliance and make the overall taxpayer experience easier …we are no longer talking about potentials. There is no profession, including football that’s not making use of it…in football you have the VAR that helps the referee decide on any issue. So we have leveraged on digital technologies to improve tax collection …the governor has invested heavily in the digitalization of tax collection and am certain would continue to especially as we continue to improve collection. We have a duty to justify the investment in digital technologies. Being online means our taxpayers know we are open and reachable round the clock and throughout globe. We are running an ICT-oriented Revenue Services. We have an Integrated Tax Administration System (ITAS) that is accessible via itas.irs.sk.gov.ng and like I said earlier all our operations have been automated. Activities from taxpayer enumeration, unique taxpayer id generation, bill and invoice generation, electronic payments with more than 5 payment channels, tax assessment, tax clearance certificate, e-receipting and many more.
QUESTION: The Kaduna State tax law prohibits and criminalizes cash collection by staff of the Service, which has helped in blocking leakages and in improving collection. Do you have such a provision in your law?
Answer: Prohibition of tax collection is captured in our tax law and I believe that Sokoto State law initiated this before Kaduna State, it has been a practice here even before the deployment of automated method of payment. Cash collection is a serious misconduct …the law prohibits cash collection from taxpayer by our staff. And payments can only be made directly to the revenue accounts, and that has been simplified and automated through payment gateways.
QUESTION: How many people and businesses have you taken to the tax tribunal?
Answer: You will be surprised by the level of commitment of our taxpayers. …and this is important in terms of tax compliance. We are extremely happy about their commitment because it important for us and again the governor has been very helpful by delivering the dividends of democracy which was absent during the Aminu Tambuwal administration. Again it speaks good about the relationship between the taxpayers and the Sokoto State Internal Revenue Service. This relationship is critical. The law requires that before we drag any tax defaulter to the tribunal that we must serve them notices- the first reminder, a second reminder, and then the final one. Thankfully most of our taxpayers comply before it gets to that stage.
QUESTION: We can’t underestimate the importance of collaboration and partnerships between your Service, other relevant revenue agencies, and the chambers of commerce, industry associations, and professional bodies. So have you created this mutually beneficial partnerships that would foster increased revenue generation through joint initiatives, knowledge sharing, and resource pooling?
Answer: We value our stakeholders, and they have helped in achieving the success we have recorded. We have had series of meeting with critical stakeholders regarding tax collection and in bringing new members/taxpayers into our tax net.I must commend Governor Ahmad Aliyu Sokoto for the favorable business policies of his administration. The State Government programmes would assist entrepreneurs and startups to access funds to start and develop their business.
“We have drastically improved the Internally Generated Revenue(IGR) from about N2 billion monthly when we took over to N3.8 billion monthly under one year. And we are determined to meet and surpass the N37 billion target set for us in 2024.”
QUESTION: A robust monitoring and evaluation system is a critical element in improving revenue generation through regular assessment of revenue collection processes, performance tracking, identifying bottlenecks, and implementing corrective measures are instrumental in ensuring efficiency and transparency. You want to talk about it?
Answer: Revenue post-mortem allows us to most importantly avoid repeating mistakes and for them to see the end result of their head work …it also boosts morale. We take post Mortem analysis seriously because it provides us with ways to assess our revenue collection processes, performance tracking, identifying bottlenecks, and implementing corrective measures which are instrumental in ensuring efficiency and transparency. We are a public sector agency …with the mindset of the private sector because it drives continuous improvement.
QUESTION: What is your message to tax defaulters?
Answer: My message to tax defaulters is very straightforward. We have put them on notice that we are determined to collect every kobo due to the Sokoto State Government. And from the recent enforcement activities carried out by the Service they understand that they have no hiding place and that it’s in their interest to pay and as when due. We have embraced digital technology and that has been effective in driving collection. And the new management team of the Service continues to make it clear that payments must be made using accurate tax table. This is what tax compliance is all about…by applying the wrong tax table the government is short changed. We will also increase collaborations between all the service and the MDAs.
