At last, RIRS, unions agree tax rates, harmonise taxes

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* Now, Rivers informal sector tax drive to kick-start

 August 1, 2019

* How Rivers may have cracked the informal sector

tax drive formula

  • Months of planning by RIRS
  • Stakeholder session series
  • Joint committee of groups and RIRS to fashion agreeable steps
  • Final roll out delayed till August 1, 2019, to capture all views

By Codratus Godson

The Rivers Revenue Service (RIRS) and leaders of various business groups have been in meetings for weeks after two months of public hearings. At last, both the government tax agency and the sector leaders have risen and submitted resolutions that would guide the much-expected informal sector tax drive in the state. Many expect peace and order to rule in the process of boosting the IGR of the state.

Details:

After several months (if not years) of patient planning, the Rivers State Internal Revenue Service (RIRS) led in the past couple of years by Adoage Norteh seems to have found the formula for a possible success in informal sector tax scheme. Many chief executives of the board before him may have avoided it due to predictable chaos and volatility it could create, and concentrated on easy tax subheads, especially the Pay As You Earn (PAYEE) from corporate workers and public sector. Many feared it could cause political backlash for the administration that appointed them.

Now, Norteh, a tax expert, went to town, to the same informal sector groups, burrowed into their core and found the way to their hearts and how to mine from their vaults. He now set up a committee mostly by the same people that would want to make trouble, and is now set to announce a resolution. This was reached after several months of consultations and stakeholder-engagement sessions covering each trade group and professional group in the state; from the informal of the informal to those he descried as structured informal sector.

At the end of the strategic sessions and engagements, it was the heads of the informal and formal sectors that announced the resolutions to the world, with the RIRS executive merely coming in at last to concur. This is expected to send positive signals to the entire taxpaying community in Rivers State that an acceptable and peaceful tax collection system is born.

 

Announcing the resolutions, the chairman of the Rivers State Joint Committee on Implementation of Informal Sector Tax Collection, Uba Obasi, who represented the Manufacturers Association of Nigeria (MAN), backed by the secretary of the committee, Clement Akamgbo (from the organized private sector and member of the Port Harcourt Chamber of Commerce) said key associations that decide how informal sector groups such as Pillar of Association, SME leadership group, Rivers Drivers Cooperative, MAN, PHCCIMA, etc, were members of the committee.

Obasi, CEO of ALCON, manufacturers of specialized low voltage products, said the objective was to look into how the RIRS could capture the revenue of the informal sector in the state. He told newsmen that it was also to reduce multiple taxes and usher in peace in the tax collection process.

He stated: “We have just fashioned a resolution and it would be forwarded to the Executive Chairman of the RIRS. If accepted, it would bring to an end the problems bedeviling tax collection dives in the informal sector in the state. Implementation would now be easier. We need the information to spread to all taxpayers in Rivers State that the stakeholders and the Revenue Board have agreed on how to collect taxes from the informal sector. This will take off on August 1, 2019.”

When pressed, he told newsmen that all groups were represented in this exercise. He said:  “Pillar of Associations captures a huge chunk of informal sector businesses. We have the group coordinating SMEs, we have the drivers cooperative society, the drivers welfare association, the MAN that also interacts with informal sector people, etc.

“We did a thorough job of taking papers from groups and going through all of them, engaging key stakeholders, especially determining tariffs of transporters.”

Sources said the committee may have tackled the biggest headache confronting tax payers in the state and the issue that dominated discuss at the sessions, which is numerous tax subheads. It was gathered that the taxes to be collected in the state may have been pruned from 24 to seven. Obasi however asked newsmen to wait till the details were published by the RIRS.

The secretary added thus: “We obtained the feeling of the business people and this is reflected in the final report. Now, we have one payment point. The report is easy to interpret, too. The important part of the job has been done, such that the people now know what to pay, how to pay, and where to pay. All they have to do is register with RIVTAMIS (launched in March 2018). It has been simplified such that a business can choose to pay monthly or yearly.

“We were very happy for the setting up of a committee to help the Revenue Board fashion out a way of collecting taxes from the informal sector without rancour. Tax harmonization has been a lingering issue in Rivers State from administration to administration. Now, it has been done by the RIRS under Adoage Norteh.

“It has been a tireless work. All groups were represented and our position cuts across all shades of opinion. This will surely bring about a lot of succor. Ease of Doing Business (EODB) in Rivers State will definitely be boosted starting from a healthy and peaceful tax environment. Everything every category will pay has been carefully itemized and it is now clear what to pay, how to pay, when to pay, and where to pay.”

The well-known group, Pillar of Associations, led by a comrade, Emeka Onyekwuru, supported the outcome. He said: “We are grateful to the Rivers State government for this exercise because this is what will bring peace in the state as far as tax collection is concerned.”

The executive chairman of the RIRS (Adoage Norteh), who later breezed in to commend the exercise, said the committee truly did huge work and that it was a big sacrifice by representatives of the private sector operators to help in the tax collection task of Rivers State. “We wanted the true view of the taxpayers in the state. We will look at it first before deciding on adoption of the report, but we can’t throw away the entire report. That would mean we should not have even set up the committee in the first place.”

Many described the present RIRS as a listening agency. North said: “I regard this report as an olive branch from the Government and I expect taxpayers to embrace it. Let us join hands to eliminate touting. Now, the tax atmosphere is expected to be clear. We could have fixed the taxes and rolled out the drive but we chose to consult and engage. Kick-off will start with serving demand notices in line with this resolution. We will release the taxes. We will serve what we call ‘presumptive amounts’ because there have been no individual assessments. We plan to release leaflets and handbills. People should also visit our website.

“We insist, do not pay cash. Any person demanding cash is fake. We will not push many people into the tax space to demand for tax. Else, touts capitalize on it. The activities would be streamlined and calm. We may work with the unions where necessary. There would be no handwritten receipts. The IT payment platforms would generate receipts as you pay.”

Norteh took time off to explain further what he meant in the issue of churches and tax. He made it clear thus: “Churches as registered non-profits will not pay tax but when they engage in profit-making activities, they will have to pay. If church members go to work and earn income, they will pay tax.”

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