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Curbing revenue wastage as panacea for Nigeria’s development

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By Francis Onyeukwu, News Agency of Nigeria (NAN)

Many states and even the Federal Government often cite paucity of funds resulting from poor revenue base as the reason for their inability to provide developmental projects and pay minimum wage to workers.

This argument has persisted overtime, in spite of multiple revenue windows which abound for governments to explore to boost their revenue bases and face the task of governance frontally.

Revenue derived from natural oil and gas forms the bulk of the funds shared by the federal, states and Local Government Areas at monthly the Federal Account Allocation Committee (FAAC) meeting.

However, other revenue streams abound but are not well harnessed due to various reasons which are not far from ignorance, ineptitude and corruption.

The sources of revenue vested in the federal, state and local governments by law are much given the abundance of natural resources and mega population of Nigeria.

For the state and local government alone such revenue windows include, taxes on businesses and individuals, licensing of commercial activities, property rates and land use charges.

It also includes levies on markets and motor parks, permits and fees on construction and development, waste disposal, taxes on luxurious goods among others.

Economic analysts believe that with a population estimated at no fewer than 200 million people, Nigeria is a huge market for taxes, levies and transfers, among other Internally Generated Revenue (IGR) options.

But baseline question is: are these revenue windows properly tapped and managed by government?

Why is it that season and out of season, governments keep complaining of paucity of funds to address the challenges of governance?

Mr PaulChuks Umenduka, Anambra State Director, Woman and Family Advancement Initiative (WAFAI), an NGO, said the local government’s revenue drive had been hampered by the state governments who have literarily hijacked that tier of government.

“If the local government areas are allowed to operate as stipulated by law they will be alive to their responsibilities, including collection of taxes, levies among other revenues,’’ he said.

Umenduka says with the practice by which governors now superintend over the allocations due the council areas and what they spend the money on many activities will suffer.

According to him, under this practice, revenue windows will either lie fallow or given out to revenue contractors for political patronage thereby creating avenues for potential wastage gaps in the system.

Umenduka said worried by the losses incurred by the local government as a result of state governments interference in their finances, WAFAI recently urged the Federal Government take deliberate steps to make that them truly autonomous.

He said this should include giving the Independent National Electoral Commission (INEC) the powers to conduct elections for all the tiers of government.

He said if such amendments were effected in the constitution by the 10th National Assembly the IGR of local governments would return to impressive status.

According to him, local government revenue in Nigeria is an important component of the country’s economy, and is essential for providing basic services to communities.

He said while there were challenges to ensuring a stable and sustainable revenue base, local governments continue to explore new revenue opportunities and improve their service delivery.

Mr Dom Iwuoha also holds that a lot of revenues due government were lost through engagement of contractors to man their revenue windows.

Sharing a life experience, Iwuoha said he almost lost his life when he was employed as a revenue agent by a politician who had a revenue collection contract at Naze Industrial Market near Owerri.

“As one of the agents, our duty was to collect tolls from vehicles that came into the market and at later we checked the daily collections and delivered the money to our principal.

“I was oblivious of the usual practice by the old workers that after daily collections, they keep back almost 90 per cent of the money they made and hand over about 10 per cent to the owner of the revenue window as what they made.

“When after the close of work that fateful day, we calculated the monies we realised and the `boys` said how much we are to pay into our principal I told them it was unfair for us to short-change him.

“Unknown to me that my objection irked the old workers, they said okay, let us suspend the account for that day and do it at the end of the week.

“When we arrived for work the next day, I noticed a lot of usual movements and discussions amongst the old workers. About the closing hours, some rough looking boys started milling round the place’’, he said.

He said he escaped being lynched by touts hired by his colleagues because he suggested that they fully account for the money they collected.

Besides the Iwuoha experience, similar situation abound in many revenue windows outsourced to individuals in parts of the country.

In many advanced economies grassroots government are take measures such technology to streamline collection processes.

Mr Michael Amaechi is an agent to one of the third party insurance outfits operating in one of the states in the South-East geo-political zone.

He has been in the job for about 20 years before he became `chairman` as the leaders are called in their circles, three years ago.

Amaechi said, before he joined the group, he was a commercial bus driver.

“The third party insurance job is a money spinning job. But you cannot eat alone if you must last long in the business.

“At the end of the month, you must make returns to key partners including some top officials of ministry of finance and strategic security personnel that play roles in the business.

“If you can keep to the rules, what you take home regularly will be substantial to make you rich at a very short time,” he said.

He said the practice of outsourcing third party insurance was a source revenue leakage and unnecessary waste of IGR that needed to be addressed.

Federal Capital Territory, (FCT) satellite towns daily disposal household refuse are handled by scavengers popularly called “baba bola’, otherwise a major revenue source for local governments.

For Mrs Ese Williams, Head Business Desk, News Agency of Nigeria (NAN), Abuja curbing wastages from revenue windows is a serious one and calls for concern by government.

Williams faulted taxes collection mechanisms, adding that only government and company employees pay taxes because they were deducted from the salaries.

She insists that government must rejig the method of revenue generation so as to strengthen stabilise the economy.

Williams said that Nigeria with its jumbo population and abundant natural resources ought not to operate in lack if its resources were properly managed.

“I pay more than N40, 000 monthly as tax monthly and yet most business owners making more monies than civil servants do not pay tax and this is unfair to the workers’’ she said.

Williams regretted that in spite of the burden of living with heavy tax workers were still responsible for providing their own security, water and others that the government was supposed to provide for them.

“Government should sanitise the revenue windows by engaging institutions with the right digital technology for revenue collections.

“If this is done, every taxable institutions and individuals including the politicians and business owners will be paying taxes and a whole lot of revenue will be available government to face the task of governance’’ she said.

She insists that what is currently going on, that giving out revenue windows to relatives and political friends will continue to rob the nation of huge IGR thereby slowing the paces of development in the country.

“I remember that in the Federal Capital Territory sometime in the recent past, there was reported  case of some revenue agents who printed their own receipts outside the official one they were given,’’ she said.

Nigeria is a huge market for income generation. However, the safety net to minimise wastage through corruption is not tight enough.

Governments should sanitise their revenue generation instruments for optimal performance and drastic drop in leakages.

Only by so doing would they meet the aspirations of the people, including workers who are yearning for an upward review of their salaries. (NANFeatures)

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