Nigeria Matters

Nigerian Revenue: In Public Or Private Pockets?

The Chronicle of discipline and public ethics has not yet taken place around us. In Nigeria today, the biggest threat to our economic growth, and our continued existence as one Nation, is the inability to render account and questionable stewards. There are many Nigerians who think that Obasanjo is the biggest threat. Of course, Obasanjo by his history alone and “unstatemanly” behaviour is a threat, but he is far from being the biggest threat. The public Servant is!

Nigerian politicians and some of their appointees firmly believe that occupying high offices entitles them to openly flout the laws of the state for economic gain or to personally help friends and relatives to be rich. They use state money as personal largesse. This unconscionable behaviour is very unpatriotic. It is a great honor to be elected or appointed to high office to use one’s expertise or knowledge to help the country. To abuse these high offices resulting in financial loss to the state deprives the nation of funds needed to build schools and other infrastructure. Millions of dollars, and possibly billions, have been stolen by greedy officials and their cronies. The detection and prosecution of crimes against the state are pluses to the democratic process.

The Internal Revenue Board of this Government has been found to have misappropriated N37 billion. Preliminary investigations have revealed that insiders may have stolen the money. An accounting system which provides that only one person has knowledge of how many applicants have physically dropped by and paid to PAYEE credits, pay taxes or register their pension-tax, lends itself easily to severe financial malfeasance and abuse. For an embezzlement of this nature to occur, I am tempted to assume that one of two things happened to make it possible.

The first revelation is the use of investigative tools to expose any form of malfeasance, in this case financial. Whether it is investigative reporting from journalists, the work of the Code Of Conduct Bureau, the EFCC investigation, or investigation from the Nigerian Police, it becomes very apparent that good governance and the rule of law are working. This then shows that democracy is indeed getting rooted in Nigeria.

Under an undemocratic and dictatorial regime these great institutions of democracy do not function properly. Under such a regime if these institutions are allowed to operate at all they do help the dictator to tighten his grip on the country and to have complete control over the wealth of the nation since all top officials kowtow to him. In that kind of atmosphere nothing is working to check the abuse of power. Democracy is being trampled in this situation and the people have no rights as regards accountability and transparency because checks and balances do not exist.

Meanwhile, this country is losing millions or billions of dollars because of individual greed and corporate fraud. The key parastatals viz; the NNPC and the Board of Internal Revenue need to mount the puppet for stewards. The existing infrastructure that recently collapsed in most part of Nigeria including Roads and bridges are not being constructed or repaired. Hospitals have no new equipment. Text books and computers and well-equipped labs are beyond the reach of students, and school buildings are crumbling. This is happening because million of dollars are being siphoned from state funds by top officials and greedy entrepreneurs camouflaging as investors.

How do the people become aware of economic malfeasance by the nation’s top officials? Seasoned and knowledgeable investigators and detectives are the reasons why the public should be aware of this NNPC and Board Of internal Revenue case and other frauds. The accounting system that the Board of Internal Revenue office operates is probably outmoded. A store keeper receives checks from the Accountant Generals Department and payments that are received from the public are probably kept in a safe somewhere in the office for several months during which little or no internal auditing is done. VAT has no record. No other way may be found to cross reference the money that flows in with how many people may have made payments. Which means therefore that in the mean time that a store keeper is engaged in his devious tricks until his nefarious activities are exposed, it is not easy to discover what is going on.

I am only making assumptions at this point; but if this theory is correct and this is was what happened at the NNPC then the accounting system they operate is indeed obsolete, and needs to be revamped. A modern accounting and administrative system would ensure that as soon as the applicants walked in to request draft lodgment fees to lift from the NPDC, they would all register at the reception. How about the production sharing contracts, which splits the cheque, to how many private accounts? Most times our oil is stolen by those whose immunity glows within this regime. In the same way, there would be designated charges for every name, quantity, and designation of the oil we produce, and applicants should be made to log all related information at different sections of the office. Even a casual look at the daily log book would reveal how many corporate organizations received transactions for the different categories of licenses that are issued at the DPR office; or how many people paid contractors’ registration fees in the Multinational oil companies that operate here. A simple arithmetic would give you exactly how much the office has collected on any given day.

Not only would that, but the DPR license issuing officers also log every applicant into their books at the time they give out the licenses, indicating when an applicant is refused a license. In countries where the office takes its own pattern of service, a log is maintained even at the point where the applicant is served.

Next comes when the applicant actually pays the fee charged for the OML license, soluble taxes, or round-1 oil-bloc bidding fees; obviously, the individual receipts issued would indicate how much money was collected on any given day. Let’s say at 3 or 4 o’clock, the DPR license office closes to the public and begins to take stock of the day’s business. A supervisor picks up the reception log book, goes to the DPR license officer, tax officer and registration officer to collect their log books, and if there is a REMITTANCE Department, takes their log book as well. It would be stupid for any store keeper to try to doctor his figures, because the supervisor knows by now how much money the office has raked in even before he goes for the duplicates of receipts issued to the public. When he/she puts all three or four sets of data together, there should be a match. If not, he should find where the discrepancy exists before the office closes for the day. Afterwards, all the cheque and cash collected that day should be sent to the bank and none of it kept in a safe at the premises of the office.

Such a system would ensure sound bookkeeping and administrative efficiency, at the same time as eliminating the temptation and opportunity to misappropriate state funds.

I want to assume that this is not the system in place at the Board of Internal Revenue, which is why it was so easy for a store keeper to steal so much money; and which is even more bizarre, why it took anyone so long to discover the theft since it had been going on for a long time. Are we Nigerians that inefficient? Most civil or public service organizations in Nigeria continue to operate the old decaying accounting system that the country inherited from the British government at the time of independence. I cannot understand why past governments have done nothing to revamp this system and modernize it to reflect changing circumstances. I have heard it said many times that the shortage of qualified accountants in the public sector has stymied our governments’ efforts to streamline public service accounting procedures. Nothing can be farther from the truth than that.< br/>
It does not take a team of professional accountants to establish an efficient and workable accounting system. All it takes is an imaginative team of intelligent and hard working people, fired by the virtues of good work ethics and patriotism. We could, hypothetically, fire all the accounting personnel at the NNPC and replace them with a fresh crop of intelligent SSS 3 graduates who have no formal training in accountancy. If we kept a proper log of the inflow and outflow of applicants, something similar to the paradigm I have outlined above, we could infuse common sense and sanity into the financial affairs of the NNPC, and many other state enterprises for that matter. Of course if an organization deals with formulating and executing fiscal policy and/or dealing with a multifaceted accounting procedure, I could understand the need for qualified accountants. But no complex accounting procedures are done at the NNPC; their job is mainly the collection, counting and putting away of money the office charges the public for miscellaneous licenses, taxes and Oil/gas contractor’s registration.

If the above hypothesis is right then the Ministry of Petroleum Resource, and whichever sector ministry; Finance or special Duties that oversees the work of the Internal Revenue, should put a new and modern accounting system in these two places that would address the financial impropriety that is going on right now within that outfit.

If on the other hand, such a system is already in place, and yet we are seeing this kind of embezzlement then a second theory might help to explain this occurrence. A high degree of collusion, connivance and complicity among the staff of these public parastatals could have led to this spate of financial embezzlements that has rocked the outfit. I was agonizing over this particular NNPC embezzlement, and others like it, with a compatriot just last night; and he was emphatic that there must be a big racket involved in any such embezzlement. He was sure that since such misappropriation is usually a result of systemic problems in an organization, whoever are supposed to offer strict supervision are themselves often involved in the act; and so having compromised their integrity, they lack the moral authority to be vigilant. If such was the case, I suppose the police would not find it difficult at all to establish the perpetrators and hand them over to state prosecutors for justice.

We are a very poor country that is heavily indebted to other nations and overseas lending institutions! And we may get poorer if corruption is not controlled. Even as the government’s sources of revenue keep dwindling as a result of a declining oil revenue economy and sudden budget deficit, it is sad to note that corruption and greed are siphoning away a lot more potential revenue to our country, Nigeria. Of course, the socio-economic situation in Nigeria is harsh and unbearable! Granted. Salaries and wages that are paid to workers in the public sector are pathetic. Granted. Unlike their counterparts who live in developed lands, Nigerian workers have little or no access to credit facilities to cushion them against the difficulties of life. Hence, in Nigeria, to put it jokingly, “onye kpara nku ahuhu, ziri ngwere obia”, meaning that there is no respite or escape for you in Nigeria when you find yourself in dire financial straits. Consequently, as citizens struggle to make ends meet, they find themselves driven to points of desperation, which is the reason for so much corruption and embezzlement of state funds. All of that is granted. Nevertheless, it would be a lame excuse to say that because workers can’t make ends meet, the looting of state coffers should continue! Something ought to be done about it, and soon too, before the whole country caves in.

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