Timothy Olanrewaju, Maiduguri
The big pot of water half buried at the middle of Malam Bizi’s expansive compound has served the family and guests for about two decades, providing cool water for drink especially during the dry season in northeast Maiduguri, known for its hotness in dry season. But something unusual is happening to the mud pot. It appears to be ‘drinking up’ the quantity of water kept in it and sometimes leaves the family in dire need of the natural gift.
On the day Sunday Sun visited, Hajara and Hauwa had filled the pot with about four buckets of water in the morning but were surprised to note that the pot was half filled an hour later. Ironically, none of the family member had drank from the pot. In fact, the plastic cup usually placed on the pot for use still lay on a small table in the kitchen. Surprisingly too, the surrounding of the pot had remained unusually wet in recent time. “I eventually discovered the pot was licking,” Bizi told Sunday Sun during a visit to the family compound at Njimtilo, a suburb of Maiduguri. “The more my children fetch water into the pot, the more the water ends up in the soil around the pot. It is as if the pot is drinking the water,” he added.
The case above clearly illustrates how officials siphon public funds through tax diversion without the authority knowing – in much the same manner that the Bizis couldn’t detect the water in the big pot was drying up. Millions in revenue had been reportedly diverted from the points of collection in Borno State. Sunday Sun investigations show that some officials collect taxes (water) in the name of government (big pot). Sadly, either half of the revenue is remitted or in most extreme cases, never get to the government coffers.
Borno State Board of Internal Revenue (BSBIR) is empowered to collect all taxes on behalf of the state government. It is one of the busiest public offices in the state with more than 300 staff both in the state capital and local government areas. Human movements, brief conversations and movement of documents characterized activities at this office as the reporter observed for two weeks. There are also over a dozen racketeers around the building ready to procure various documents ranging from vehicle particulars to motor license for a fee. It is such a business centre but behind this lay a profiteering move by some officials, Sunday Sun gathered.
According to information on the website of the board, www.bornosirs.bo.gov.ng, BSBIR collects both income and personal taxes. Taxes are collected from individuals either in employment of the state government or from those running their own small businesses under any business name or partner, a Lagos-based banker and tax analyst, Bamidele Bello told Sunday Sun. “The state government is responsible for collecting such taxes,” he explained. He said banks and commercial institutions also remit their taxes based on their profits.
The Personal Income Tax Act (Cap P8 LFN 2004) guides the current taxation of personal income. The law empowers the federal and state tax boards to identify persons living in or earning income from the areas of their abode who are required to pay tax, assess incomes and tax their incomes using specified guidelines and rules. The law also guides tax officials to identify the residence of potential taxpayers, the sources and origins of their incomes for the purpose of taxing them based on their income.
However, there are alleged leakages in the process of collecting these taxes by some officials of government, very credible sources in the tax offices revealed to Sunday Sun.
Some officials of the board have developed strategies to circumvent tax collection in Borno State. A source revealed that one of the ways is double invoicing. “It is a common thing and it has been happening for a long time,” the well placed said.
“We have receipts for ourselves, sometimes we give return to our bosses in the office,” another official added. “It is not a new practice,” he insisted. A copy of the receipt shown to the reporter indicated a marked difference between the government own and the one done by the officials. The Nigerian coat of arms on the government’s receipt is bold and darker. Likewise, the receipt is thicker while the other one is lighter. Though, the board was said to have introduced e-payment few years ago to block leakages but it was gathered that some officials still found a way around it especially with taxes on businesses. Sunday Sun discovered it is one of the worst affected.
Some officials also charged payees, especially owners of businesses, different amount without checking any income book. “Taxes are charged based on income and gains,” Bello explained but the approach of these officials differs. The poor collection system has not helped the matter,” a tax officer said.
The Board of Internal Revenue has a form which tax officials use in assessing amount payable by payee especially owners of business as part of the revenue to the state. “They have a form. They look at the shop and calculate what I will pay. Sometimes they charge higher and then we negotiate like from N15,000. You can beat down to N6,000,” Yohanna Ali (not real name) revealed. Sunday Sun probed further on why taxes would be negotiated without checking the book. “The men collecting aren’t remitting to government. This is why they are not following the right process,” he added. It was gathered that often times, receipts are not provided for the payment made. But many of the taxpayers alleged the officials often made promises to return with the receipts but never surfaced until another year. “It is a very clumsy situation but we can’t question them,” he said further.
Taxpayers said they are sacred they could be victimized if they demanded explanation from officials. “We are here doing business. We don’t want problem with government people,” Aminu Ibrahim said.
“Associations sometimes pay collectively; they pay on behalf of others. Sometimes we get receipts issued to payees on individual basis or we don’t get at all,” Chinelo Eze said.
Babanlayi, the commercial nerve centre of Maiduguri occupies about 465,000 square feet. It is the home of electronic and textile both in wholesale and retail mostly shipped from Senegal, Dubai and other countries. The area also shares boundary with Maiduguri Monday market, an international market with huge commercial activities. An official of a commercial bank in the market said taxes collected in the two commercial areas in a month could be as low as N10 million and as high as N100 million. “Government should get up to that if tax officials are honest and patriotic because there over 2, 000 business units within these area,” the official disclosed. This means that government will get as low as N10 million if 2,000 business owners pay N5,000 each in a month. But then, there are those that pay between N10,000 to N50,000 depending on the types of business they do. It means government could rake in as much as N100 million from these commercial areas and other corporate businesses in the state including contractors who remit their acceptance fees and other taxable amount to the banks. This amount, some experts said, could adequately provide five blocks of classrooms with each having at least five classes.
Borno IGR in 2018
In 2018, Borno anticipated a total of N16, 870, 934 billion as internally generated revenue (IGR) to finance the N181 billion budgeted for the year. However, the state raked in only N6.5 billion (a quarter) as its IGR, one of the lowest in the country for the year 2018. Some officials in the state finance ministry attributed the development to leakages in the revenue collection and remittance by tax officials.
Sunday Sun also discovered that the state government does not have any mechanism to check leakages unlike in some states that adopted the e-payment type or in some cases, contract private tax firm for tax collection.
Chairman, Borno Board of Internal Revenue, Alhaji Ali Manga Bulama, when approached for comment of the discovery, he said: “I don’t talk to journalists.”
The burden of development
Many argued there is a connection between development and corruption. No nation or society can experience development when public resources are diverted or tampered with by public officials, Prof Yusuf Mohammed Yusuf of the Faculty of Law, University of Maiduguri said. “Revenue is important to the government for provision of basic human needs like health facilities, education and water,” he told Sunday Sun.
Development in Borno, an agrarian state in northeast Nigeria with a population of about 4.2 million has remained low with poor infrastructure even before insurgency. It relies heavily on the monthly statutory allocation from the federal government. Often time, the government has complained the allocations cannot meet its obligation to the people. For instance, the state spends over N500 million monthly on wages out of about N2 or N2.6 billion statutory allocations. “There was a time in 2016 our federal allocation was as low as N2.6 billion and we were paying about N1.6 billion in wages,” former governor, Kashim Shettima said late December 2018 at the presentation of the 2019 budget. More funds are required to rebuild most infrastructures damaged after a decade of Boko Haram violence.
Some residents said taxes could have helped boost the state resources and fill the gap but oftentime state revenue is diverted by officials. “Such acts stagnate development and the people suffer,” Olanrewaju Suraju, executive director, Human Environment Agenda (HEDA), an anti-corruption campaigner said at the sideline of the 14th Anti-Corruption Situation Room (ACSR) held recently in Maiduguri.
Water is scarce in most communities in Borno State. Water vendors called mairuwa are common sight in Maiduguri, the state capital with a population of about 1.5 million people. Residents said they spend a good portion of their income on buying water daily. “I spend N200 daily to buy water for house use daily and it cost me N6, 000 every month,” Abba Musa disclosed. Musa spends roughly N72, 000 in a year on water alone as a middle class worker earning less than N3 million in a year. He believes N100 million was a huge amount to provide 20 boreholes or 10 health centres in the city.
“Blockage of every corrupt channel in the system will go a long way in recouping stolen wealth and using such resources for the good of our people,” Executive Secretary of the Presidential Advisory Committee Against Corruption, Prof Sadiq Radda, said. He urged Nigerians to support the anti-corruption campaigns. “It is s collective campaign and should not be left to the government alone,” he said.