Kwara State government recently took a giant stride to find lasting solution to the shortage of funds that had been a cog in the wheel of progress of the state as a result of low monthly federal allocation due to the state from the federation account, reports Hammed Shittu

It is not an exaggeration to say that, things are not at its best for the 36 states of the federation this time around. This reason is not far-fetched as the monthly federal allocations that used to come to their coffers for the implementation of various developmental programmes for the people that elected them into offices had been dropping for past years. And this has put some of them under pressure  in view of not being able to meet the yearnings and aspirations of those that voted them into offices.

The ugly development was occasioned by the falling prices of  crude oil at the international  ‎market, which hitherto has hampered federal government from generating more revenue to be shared monthly among the three  levels of governments in the country. For example, the prices of crude oil which used to be sold above  $100 per barrel at the International market are now at below $30 per barrel and this has put Nigeria in a state of economic downturn as the oil sector which has been its major source of revenue generation has seen a sharp fall in crude oil prices.

Also, the alleged financial  recklessness on the part of some state governments in the country that had led to large-scale  corruption is also an issue.

This has no doubt  led many of the state governments in the country to result to borrowing either through the money market or capital market to carry out their programmes and thus creating huge debts.

Kwara State is not an exception in these challenges. The state, which, hitherto, collected the monthly federal allocations of over N3 billion is now collecting over N1billion as monthly federal allocation and this has continued to have serious effect on the financial status of the state. The state has been battling with unpaid salaries of teachers, lecturers, among others for the past few weeks and the development led the primary and junior secondary schools as well as lecturers of the three state owned tertiary institutions to go on strike. It took the intervention of the Senate President, Senator Bukola Saraki, and the Emir of Ilorin, Alhaji Ibrahim Sulu Gambari, before the striking teachers could call off their three-week strike in the state.

However, as part of moves to address the dwindling financial mess occasioned by inadequate federal allocation every month,  Kwara State government, under the leadership of Alhaji Abdulfatah Ahmed, decided to boost the machinery on ground to revive the revenue generating capacity of the state.

In the desire to bring positive results to the new revenue agenda, the state government decided to repeal the existing law that  set up the state revenue board and promulgate new law through the state house of assembly so as to get the legislative backing for the commencement of the new revenue regime in the state.

The new revenue law, which is called, “The Kwara  State Administration and Collection of Revenues law  of 2015 seek to monitor all revenues  due to the Kwara Government and 16  Local Government Councils in the state.  The law, which also establishes relevant administrative structures intends to check loopholes and consolidate on internally generated revenue (IGR) for the two tiers of government in the state.

It equally established a board to be known as Kwara State Board of Internal Revenue at the state level and  Local Government Revenue Committee at the 16 councils in the state.

In order to set the revenue regime in place in the state, the state government recruited some financial experts as workers and they were exposed to series of training and workshop from those states that had been using the revenue generation strategy successfully in the country especially Lagos state. The exposure has given the newly-recruited officials a wide spectrum of day-to-day operation of the revenue generation in order to assist them accomplish the target goals of the state government  increased revenue generation.

Also, the state government put in place a court that will try any violation of the revenue generation in the state. This, the state government believes, would deal with anybody or group of people and even corporations or companies that may likely try to avoid the payment of their revenue and taxes due to the state.

To show his seriousness in its avowed move to make IGR a culture in the state, the state government last Monday inaugurated an  ultra modern building tagged, ‘Revenue House.” The inauguration was performed by Governor Abdulfatah Ahmed.

In his welcome address at the opening programme of the revenue house, The Chairman of the State Board of Internal Revenue Service, Dr. Muritala Awodun, said: “The quiet revolution in the revenue collection system of Kwara State started over a decade ago when the present governor of the state was the commissioner for finance.”

According to him, “The state of internally generated revenue was dismally low that efforts to shore it up became inevitable and the government under the leadership of His Excellency, Dr Bukola Saraki as governor of Kwara State therefore took specific steps that involved the automation of the system of collection and recording of collections through the engagement of revenue experts that saw the IGR moving from less than a meagre N100million monthly to about N400million monthly.”

He said: “This was a very significant increase knowing the low level of economic activities in the state then and It is in continuation of this process of revamping the IGR of the state that made the administration of the present Governor, Dr Abdulfatah Ahmed, to go the full hug by putting together the Kwara State Revenue Administration Bill which was finally sent to the State House of Assembly last year.

“This bill which was successfully passed by the House was eventually signed into law by His Excellency, Governor Abdulfatah Ahmed on June 22nd 2015 as the Kwara State Revenue Administration Law, 2015 (Law No.6 of 2015). Kwara State Internal Revenue Service (KW-IRS), as we now know it became established by this Law, as the sole entity responsible for the effective and efficient administration of tax and related matters on behalf of the Kwara State Government.”

Dr. Awodun therefore stated that, “as we embark on the journey we ask that you tighten your belt and enjoy your flight as we coast on the journey of a monthly average of N1 billion collection in the first quarter, N1.5 billion monthly in the second quarter, N2 billion to N2.5 billion monthly in the third quarter and N3 billion monthly by the fourth quarter of 2016 with a total collection target of N24 billion for the year 2016.”

He also said that all leakages and loopholes will be blocked in order to ensure the achievement of these goals so as to improve the revenue base of the state.

Commissioning the edifice, Ahmed said the setting up of the state revenue service house  was to generate N5billion monthly so as to augment the dwindling federal allocation coming to the state every month.

He said the generation of such huge amount of money from N100 million monthly to  N5billion monthly would go a long way of assisting the state government to meet its financial  challenges in all facets of the economy and thereby accelerate the socio- economic development of the state.

According to him, ‘the aim of the setting up of the revenue house also   is to ensure that Kwara state is economically viable and self-sufficient, rising from our current position to achieve the second highest IGR per capita in Nigeria by 2019.”

He said  the new revenue drive became imperative because the economic realities in the state indicated that the monthly federal allocations were no longer enough to pay salaries not to talk of executing developmental projects.

Ahmed added that,  the government had not created new taxes for the people to pay, stressing that efforts are being geared towards blocking all loopholes that have not allowed all taxes to enter government’s account.

He recalled that, “one of the strategies we identified was to restructure our revenue collection system. Notwithstanding our best efforts, however, the defunct Board of Internal Revenue consistently failed to meet its set target of one billion naira monthly, despite getting the necessary assistance from the state government. “.

“It became evident that we needed to align IGR with current realities by  changing the people, processes and technology for revenue collection. We opted for an automated system that simplifies tax payment, eliminates multiple taxation, ensures greater transparency and blocks loopholes,” he stressed.

He also said that, “in line with this determination, we sponsored a bill to abrogate the Board of Internal Revenue (BIR) and create the Kwara State Internal Revenue Service (KWIRS). Following the passage of that bill, I signed it into law, establishing the Kwara State Internal Revenue Service (KWIRS) with the mandate to mobilise revenue, block leakages and expand Kwara State’s revenue base with a monthly target of 5 billion naira”.

“This is a significant increase from the N800million we used to generate. Indeed, some people are of the opinion that this target is unrealistic. I disagree. Kwara state, I am convinced, has the population, commerce, resources and opportunities necessary for achieving that target of N60 billion annually,” he stressed.

He however noted that, “a desk review of the previous revenue collection process showed we were losing about N5 billion annually, due to inefficiencies and leakages”.

“Therefore, through the newly-established Kwara State Internal Revenue Service (KWIRS) we intend to plug loopholes in our revenue collection system and ensure that all revenues accruable to the state government are remitted accurately and promptly,” he said.

Additionally, Ahmed said that by ensuring growth in the various sectors of the economy, and providing a conducive business environment,  the state aimed to attract new investments to the state, promote additional economic development and increase taxable revenue.

He pointed out that,”we have started broadening our economic base by taking advantage of emerging opportunities in solid mineral development and expanding our agribusiness drive. The subsequent growth in our revenues will not only enhance the lives of our people through better infrastructure, we also expect to see an increase in opportunities for collective prosperity.

“By and large with the commissioning of the revenue house in the state, a stage is now set for full revenue generation in the state that would likely usher in new improved revenue base of the state if properly managed. A new lease of life would then come to the people of the state in the utilisation of the revenue for the upliftment of the society at large.”