Dr. Yemi Sanni (FCA, FCTI), is the Principal Partner, Mazars Consulting. In this interview, he explains how Kwara State Internal Revenue Service {KWIRS} was set up, the structure, system, and automation that were put in place. Ayo Ola was there.
Excepts:
Could you explain how KWIRS was birthed and the role played by your firm?
We came to overhaul the revenue collection process and agency of Kwara State in 2014 when the KWIRS was not even in existence. It was then the Board of Internal Revenue Services. The then Executive Governor of Kwara State, Alhaji Abdulfatah Ahmed, wanted an improvement in the internally generated revenue of the state. But the structure they had then could not really give them the desired result.
So, they needed professionals who could help them change the fortunes of the state’s Board of Internal Revenue Service at that time. When we came on board, we looked at the existing structure as at then, and we were able to advise the then Executive Governor that the structure they had will not achieve the desired result then. This is because, in the then structure, the Board of Internal Revenue Service was reporting to the state Ministry of Finance. We advised them that there was a need for them to give the Internal Revenue Service administrative autonomy and financial autonomy.
To achieve those, the Internal Revenue Service had to have a revenue administration bill that will give it that power. So Mazzar Consulting, and of course, my colleagues and other teams then, were the ones that put the revenue administration bill that was sent to the Kwara State House of Assembly which was passed into law and that gave birth to KWIRS. At that time, we were able to advise the then Governor that the existing manpower they had was not going to get them to the promised land.
They gave us a free hand to ensure that we were able to recruit competent hands that will change the fortunes of the internal revenue service as at that time. So we placed an advert and we had people apply for those positions even from outside the country. I headed the interview panel that interviewed and selected all the people that applied for the executive positions, including Prof. Muritala Awodun who later became the pioneer Chairman of KWIRS. I interviewed all of them in Lagos and I presented them to the then Executive Governor. So from there, they were appointed into their various directorates.
We also saw that the processes then were not alright. So we decided to do process re-engineering and in doing that, you find out that before the time we came on board, their internally generated revenue (IGR) was about N7bn annually. But by the time we finished all the things we did, as at 2019, they were already on N24bn annually.
So it is funny that somebody will rubbish the work we did and say that there was no structure. This is the thing you see when you appoint people who may not be core professionals to very sensitive positions, one of them is the Internal Revenue Service. So you expect to have reasoned professionals, people who have desired professional qualification, either by virtue of the fact that they wrote examinations and became professionals or done things in line with taxation before they were appointed to such sensitive positions.
In addition, after we did our job, there was automation in the system and most of the things done were automated.
Somebody said there was no structure, yet the internal revenue service, after our reengineering, happened to be the first and uptil now the first internal revenue service to get ISO certification. For you to get ISO certification, that means that you have processes in place. And why did we go for ISO certification, we did that because when we were putting all these structures in place, we anticipated a situation where you could have people that are incompetent, people who are not even able to handle things being appointed. So we did not want them to rubbish the work that we did. That was among the reasons why we put the process in place so that the system could checkmate such people when they come on board. That was not only the thing we did. We did that again, not only for the Chairman of KWIRS, we also looked at a situation where you may even bring in a Governor who is not competent enough to run the affairs of the state and that was why we decided to do Kwara Infrastructure Fund, wherein a certain amount was set aside from the internal revenue generated on a monthly basis by the KWIRS into an account to fund the infrastructural project of the state. That infrastructural project was such that there was a third party who was managing it.
So whatever project they are doing such as road, hospital, school; you come, you get the project, once you are awarded the contract, for you to get paid, you must have performed because it was not like business as usual. It was not that maybe you were able to settle some people and you tell them that your work is done and you get paid. No! A third party will certify the work done and on that basis, you get paid. You do not even need to know anybody in the government to get paid. These were the things that we had anticipated.
So it is funny that somebody said that there was no structure in the KWIRS. Let us assume that I, who is talking to you as a consultant, that handled the job then is lying, of course, I believe in third-party verification. As at the time we finished all the processes we did, the result was so overwhelming that the Joint Tax Board advised other internal revenue services, apart from Lagos, to go and model their internal revenue services after KWIRS. And a number of them went to KWIRS to learn and understudy the structure put on the ground in KWIRS so that they will be able to achieve the same kind of result that Kwara State achieved then.
Were transactions automated?
Automation was also in place because when we came on board, we did electronic revenue management. Aside from us, they got some Information and Technology (IT) consultants to help them with automation as well. When we finished our job, everything was in place. The KWIRS at a point became the place that everybody wanted to work. It was a brand and everybody in Kwara State wanted to work, then.
Did you put in place a system to ensure seamless activities and transactions?
There was a whole lot of system. When you are talking of IGR drive, you are talking of the administration of revenue in Nigeria, there is no way you are not going to mention Lagos State. Then, one of the things we did was that we took some staff of KWIRS to Lagos State Internal Revenue Service to understudy how things were being done there. Of course, Lagos State Internal Revenue Service is still in existence, all these things can be confirmed from them.
We went and understudied their processes and we came back to replicate those things in KWIRS. If not that, how else would they have jumped from revenue of N7bn annually as of about 2015 to N23.9bn which is approximately N24bn in 2019?
But tere is the insinuation that KWIRS had no functional structure until the current KWIRS Chairman, Mrs. Shade Omoniyi came on board. As was reported in an interview by a medium recently? How do you react to that?
It is funny to hear or read that there was no structure in KWIRS by the current Chairman of KWIRS. I would like to correct that impression or notion because the impression she gave that there was no structure in KWIRS till she assumed duties is akin to rubbishing the work that was done by my firm for KWIRS.
In terms of performance indicators, what did you people really achieve concerning that?
They jumped from revenue of N7bn annually in 2015 to N23.9bn which is approximately N24bn in 2019. If you want to go by what they are saying they have achieved now, it is very funny because when you lower your budget, and on the basis of lowered budget, you are measuring performance and you are scoring 90 percent. That is to deceive the populace. I have provided figures which showed that KWIRS was generating an average of N2bn monthly, how much are they generating as of today?
When you look at the IGR, if you want to shred the IGR they are getting today, I will bet to tell you that, from whatever IGR they are getting, please remove the amount they have generated as backlog from ministries, departments and agencies. These are backlogs of maybe six or seven years ago. We are talking about now what they generate monthly from the corporate entities and individuals that are operating businesses in Kwara State. Because when you want to compare, you must compare light with light. So that is what you need to do today to compare the performance of the then Management of KWIRS with the current management. I would not have said anything to this, if not for the fact that the statement rubbishes the work that I had done and I would not look and let anybody who probably, I can tell you might not be competent enough to hold the office, to rubbish the work that we did for the state as at that time.
Before KWIRS came on board, how was the revenue profile of the state, and what was it with the then management of KWIRS led by now Prof. Awodun?
The revenue profile of the state was low. That was why when we came on board, they were collecting N7bn per annum. As at that time, the morale of staff was low. By 2 pm, they had already closed. They did not have a functional office. They did not have functional resources to work. My firm, Mazars Consulting, recommended that they needed to have a befitting revenue office for IRS to work. That was where we identified the land where they used to build the existing KWIRS. We recommended the resources that were needed to work. As at the time we finished, the environment in KWIRS was equivalent to the environment you see in a private organization.
So who should be appointed as head of the internal revenue agency?
It is already there in the law that for you to be a Chairman of Internal Revenue Service in Nigeria, you must be a member of ICAN or Chartered Institute of Taxation of Nigeria. Now, of course, we all know that in Nigeria, majorly the appointment of Chairman of the Internally Generated Revenue Service is politically motivated. Even if it is politically motivated, it is expected that the law which specified that a member of ICAN or CITN must be the one to be appointed should be obeyed. But what do we see, you find that they appoint people who are not qualified as specified by law. What do they do? They go behind and now try to circumvent what the law said and go through the back door to get the necessary certification so that they can be ratified for that appointment. When you go through this, that is when you now see incompetencies and a lot of unprofessional comments will be evident.