Opinion

Resolving unending revenue collection crisis, blocking leakages

The collection of internally generated revenues within the Federal Capital Territory (FCT ) has brought the Federal Capital Territory Administration and the Area Councils on a collision course. CALEB ONWE reports

In the face of failing oil prices and dwindling resources accruing from the Federation Account, there is a growing scramble among governments at the subnational levels for a fair share of internally generated revenue in various states across the country.
The targets are usually rates and taxes from markets, shopping malls, small and medium scale enterprises and outdoor advertising.
In the Federal Capital Territory, revenue from Outdoor Advertising and Signage has become a very controversial subject, given several vested interests that lay claims on the proprietary rights to its collection.

A few months ago, there was an open clash between some agents of a tax consulting firm and officials of FCT Department of Outdoors Advertising and Signage (DOAS).
The fight was said to have occurred when the two groups met on the field for the purpose of collecting revenue on Mobile Advertising .
Inside Abuja gathered that the tax consultants were allegedly working on the instructions of Abuja Municipal Area Council (AMAC) because the six Area Councils have consistently laid claims to what they call ” constitutional rights” to collect such category of taxes.

But this development appears to be working against the articulated agenda of Federal Capital Territory Administration (FCTA) on shoring up its revenue base.
Minister of the FCT, Mallam Muhammad Bello, had at different fora insisted that the FCTA had supervisory roles over the Area Councils and every money meant for the territory, including statutory and internally generated revenue must be accounted for in a transparent manner.

Director, Department of Outdoors Advertising and Signage (DOAS) in the FCT, Dr. Baba-Gana Adam, said that the authorities at the Area Councils do not have proper understanding of the provisions of the constitution, hence they often equated themselves with the authorities of the Local Government Areas in the 36 states.
According to Adam, the roles of Local Governments were not the same as that of Area Councils under the constitution. Adam argued that there are no local government areas in the FCT in the strict sense of it as the territory was conceived to be developed and run as a single urban entity.

Why revenue collection fight?
Residents, especially those eligible to pay taxes have continued to wonder why two government entities would engage in a fight over revenue collection.
Of more concern is the fact that sometimes the fights between DOAS and Area Councils agents, often results in double taxation. Oftentimes, the DOAS had explained, that the Area Councils were deliberately violating a subsisting legal agreement regarding revenue collection in the territory.

Inside Abuja’s investigation revealed that FCTA and the Area Councils had earlier signed a Memorandum of Understanding (MoU) on revenue collection which was also given legal backing through by-laws enacted by the legislative arms of the Area Councils in 2012.

According to Adam, it was agreed that DOAS will collect all the Outdoor Advertising revenue in FCT while the parties will share the proceeds in the ratio of 60 per cent to Area Councils, 20 per cent to FCTA and 20 per cent to DOAS.

In spite of the existence of this agreement, the fight over revenue had continued unabated.
Recently, Chairman of AMAC, Abdullahi Candido, allegedly threatened that he was going to recover all the revenue sources which he had ceded to FCT, an indication that the agreement had broken down.
However, it was gathered that the catalysts in the fight were the tax consultants who were hitherto engaged by the Area Councils for revenue collection and are not happy that they have lost out in the game.
It was alleged that some of these consultants also fraudulently registered companies that have the semblance of AMAC and have been criminally collecting the same revenue that have been taken away from them.

Fraudulent collaboration
Adam disclosed that the fight had been endemic and deadly because there were some of government officials who were also collaborating with these tax consultants to defraud both FCTA and the Area Councils.
He noted that when he was appointed as DOAS director on May 24, 2019, he was shocked to discover that a lot of money were illegally passing into private pockets.
It was alleged that immediately the operation of the Treasury Single Account ( TSA) came into effect in the country, many of the staff started printing fake receipts with which they illegally collected revenues that were never accounted for in the official books.
Adam, who said he had been more hurt in the fight by DOAS staff than the outside elements, also noted that barely one year of his operation at the agency, about N500 million had been generated.
He said that the amount almost doubled what DOAS generated in three years, due to lack of transparency and accountability of the staff.
Inside Abuja learnt that shockingly, some DOAS staff opted to be redeployed to other departments, because their source of illegal wealth had been blocked.

Adam explained thus: “Before I was appointed, just like in every society, there is a good, ugly and bad aspects. When I was appointed in May 24 2019, and I resumed office in 28 May, they were generating very poor revenue. In 2017, they made N167million; in 2018, they made N166million, but in 2019, we surpassed N500million.
“So, what they collected in three years was N333million . In my first six months, I have generated N439million. If you put together the collection for three years, 2016, 2017 and 2018, you will see how bad it was. From December 2019 to March 2020, I have been hitting the N100million mark monthly.

“When I came, I realised that there were staff of DOAS collaborating with outsiders to shortchange AMAC and DOAS. I have reports written to me from banks and reputable organizations, saying that they paid their dues, specifically two banks claimed they have paid.
“Some of the staff of these banks came and said they have paid. I asked for the receipt of payment . They eventually brought out a company they paid to but I told them that the money was not paid into the TSA account which President Muhammadu Buhari approved for every revenue of government. I told them that we don’t recognise companies to collect revenue. The money is supposed to be paid into DOAS TSA account which even myself as the director can’t withdraw from. The money can only come out when it has been shared between the Area Councils, FCTA and DOAS to enable us operate.
“When the banks traced the payments, one of the companies collected the money through a different bank, the other company also collected through another bank. That was when the aggrieved banks came back and confirmed that their payments didn’t go to either AMAC or DOAS account.

“The payments were made into private companies and private individuals who have been feeding fat on the revenues of both FCTA and Area Councils. I will not deny that staff who were here, were collaborating with private people and that was why the generation of revenue before I came here was very poor.

“But with the good people I met and ready to work, we have changed the trajectory from dwindling revenue. We have raised it up.”
Inside Abuja further gathered that many of the staff found culpable have been punished in line with civil service rules. The Director also said he personally requested that some of the staff should be removed from DOAS, as he was not prepared to cruise along with people who will slow down the wheel of progress for the revenue agency.

“Yes, they were DOAS staff but they were working with outside people and sharing the money. In 2015, these organizations made about N500million but when the present administration came up with TSA , they categorically won’t collect and put into TSA, and people were serving themselves and making all the money.

“More than half of the staff, I requested for their redeployment because you can’t work with a bad team. It is like a football team. I am the head. If it is bad, it is me but if it is good, it is me.

“So, you have to micro manage and change their attitude. If they can’t change, what can you do? You will request for replacement. Some of the staff left on their own and I asked for those who are willing to work. As I speak with you, the rot is still there, but it is better than yesterday. Everyday, there is a progress.

“Yes, there were staff who were issuing fake receipts to people and collecting money cash, instead of paying through the TSA. When you see the receipt, they are not the treasury receipt that are printed in Nigeria Security Minting and Printing Company. When you claim you have paid DOAS, I can get the statement of account from the banks. I also get alert for every payment alongside other people like the accountants. We were hurt more by those inside than those outside,” Adam said.

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