Akan Okon, Commissioner for Finance, speaks on the challenge of generating the revenue needed, to fund the state’s development drive
With dwindling oil revenue, the resources available to the state has reduced. How bad is the situation?
The simple answer is that what you just asked is not peculiar to Akwa Ibom State but the entire country and may be the whole world. You know that our major revenue comes from the Federation Account, which also comes from the sale of crude oil. Recently, there has been a drastic fall in the price of oil on the international market. This, by extension, affected the revenue that would have accrued to the various tiers of government. Under the circumstances, as a state, we don’t have control over it. Our emphasis, however, is on working towards an alternative revenue source, which is internally generated revenue, and ensure that every revenue meant for the government enters its coffers.
The state government has therefore gone ahead to appoint a new consultant that will help to block all the leakages associated with our revenue collection system with a view to ensure that the system is efficient and effective. By this, people in the informal sector should be encouraged to assume their responsibilities in tax payments because payment of tax is the statutory responsibility of every citizen. We are, therefore, doing everything to ensure that we optimise the state’s potential in consonant with revenue sources.
How are you coping therefore with the dwindling revenue issue?
This is why I just talked about prioritisation based on available resources. It is also our intention to work closely with various international donor agencies and financial institutions to see how we can leverage the opportunities provided by this situation to push development further in our state.
Given the current economic situation in the country, don't you think, that the citizens might be over-stretched or overburdened if the IGR doesn't have a human face?
The truth of the matter is that citizens are not even complying, so the issue of placing any burden on them is non-existent. We are just saying that this is ordinarily what the duty of everyone is. It would be a burden if the government had asked anyone to pay more than what they were paying. What the government is asking for is modest: simply do what you are supposed to do and watch the government do what it is supposed to do with the money. I strongly believe in a robust system where everyone identifies his duties. In that case, there will be nothing like a burden.
Not too long ago, we returned from an IGR summit organised by the Nigeria Governors Forum where the issue was set on the agenda. There, it was discovered that in Akwa Ibom, people don’t even pay tax and tax laws are not even applied. This includes Property Tax, which brings in a lot of money. Remember also that the issue of taxes is not just a residual matter. It’s both residual and exclusive, therefore, it is not something that Akwa Ibom State government alone introduced. If you look at all the infrastructure like roads, you will discover that rich people use them more often than the poor. We expect that there will be a system that will ensure that more money is taken from them to build and maintain more infrastructure. To make the issue clear, taxes are not punitive; it is a duty. In any case, unemployed people cannot pay taxes. So, if a law stipulates that a certain percentage of your earnings be remitted to the government as statutory tax, it is not a burden.
What other areas are being explored by the state government to generate revenue?
Honestly, considering the state of things at the moment, every aspect of revenue generation will be looked into in order to augment our lean resources.
Some civil servants are complaining of being over taxed
They are being selfish. If they are sincere with themselves and God, they will in all honesty say the truth. Let me tell you something. Development partners are very discreet with financial assistance. One of the first things they look out for each time they want to assist is financial accountability. And that is in the area of tax. Among the 36 states in the country only Akwa Ibom does not comply with all relevant tax provisions, but the others do.
In the case of the civil servants you are talking about, what they pay is PAYE, which means Pay As You Earn introduced in 2004. In many states, it has been reviewed but the last time it was reviewed in Akwa Ibom was in 2011, so the state government is still using the 2011 model for 2016. What then is the complaint all about? Development partners look at all these things. It might also interest you to know that for every civil servant that pays tax, there is a 50 per cent rebate on taxes paid so that at the end of every month what is taken from each civil servant is peanuts. One of the problems we are facing in Akwa Ibom is bad publicity from those who simply do not want to know anything good about the government