By OMODELE ADIGUN
To make the nation’s tax system free of quackery and raise tax revenue available to the states, only members of the Chartered Institute of Taxation of Nigeria (CITN) should be saddled with the chairmanship of the Internal Revenue Boards of the 36 states, so says the President of the Chartered Institute of Taxation of Nigeria(CITN), Asiwaju John Jegede.
According to him, what he wants to achieve through that is efficiency, professionalism and elimination of quackery in the tax system of the country. The CITN boss, who spoke in the wake of recent judgement in ICAN vs CITN case, added that it is by so doing that the state Internal Revenue Service will be able to increase both their revenue base and revenue volume so that the state government will be able to have enough fund to execute projects that will be in the best interest of the citizenry.
What do you want to achieve by asking governors to appoint CITN members as Revenue Board chairmen?
It is a very good question. What we want to achieve is efficiency, professionalism and elimination of quackery in the tax system of the country. It is by so doing that the state Internal Revenue Service will be able to increase their revenue base and increase the revenue volume so that the state government will be able to have enough fund to execute projects that will be in the best interest of the citizenry. Not only that, if they have enough money from taxation, they will be less dependent on the federal allocation from the federation account. They can diversify their own economy. We are in a federal system of government; the states are semi-autonomous. They should be able to be financially independent. And the only way they can do that is through taxation. There is no other way. They should be able to maximize the tax potentials of each state and be able to develop at their own pace without looking for revenue from elsewhere. Even let’s look at it. We are blessed with oil and gas reserves. But this is a wasting asset. Suppose this asset dries up today, where will we fall back to? Is it not taxation? So taxation is the regular, very dependable source of revenue to government and will continue as long as man inhabits this planet. If other resources are wasting, that is why we are hammering that each state government should develop its own tax system and bring it to optimum level so that each state economy can be diversified and create jobs for the teeming unemployed youths roaming the streets. If they get enough revenue and the income of individual is redistributed through taxation, we will get positive results. Again, we are hammering that our members should be appointed as Chairmen of states Internal Revenue Service.
Money root cause of ICAN vs CITN case?
No! The fight is justice; what the law says and not money. That is what we have been saying since, there has not been mentioning of money here- who takes what and who doesn’t take what. If you look at the Constitution of both bodies, go and check ICAN charter, read it from page one to the end, you would not see taxation being mentioned anywhere. And if you look at CITN Act charter you will see the emphasis on taxation profession and the regulation. So nobody is talking about money. We are talking about the powers given to us by the law to carry out certain activities; and the powers given to other professional body. If any other professional body is encroaching on our own territory, for God’s sake, we have to shout that look, you are overstepping your bounds because we don’t overstep our bounds. We don’t encroach; we are not saying we want to practise Accountancy; and we are not saying we want to practice auditing; what we want to practice is what the law gives to us. There is no question of money that comes in here. So that is exactly what we are saying. And the court is repeating what is in our charter that only our members can practise.
What is required of ICAN members to become CITN members now?
We have two categories. There are some people who were ICAN members, who were also our members. But during that crisis, they resigned their membership and went away. Some had come back. We accepted them with open arms. We didn’t ask them to pay anything. We just treated them as prodigal son who went away and came back. So we did not accuse them of anything. (It is like,) pay your outstanding subscription (dues) and you come to the fold. That is what we have been doing. The other ones that had not joined before: that direct membership- which we had extended to ICAN members, lawyers and all the rest – right away now is closed. So if any ICAN member is coming now to join CITN, he will write our examinations, which will be determined by council where they are going to start. What is good for the goose is also good for the gander. If a member of CITN wants to become a member of ICAN, of course, he will write exams. There is no professional body in the world that you come from your house and join like that without sitting for its examinations.
What happens to someone belonging to both bodies?
The truth of the matter is that majority of members of CITN are ICAN members. I am not the only one. Even among the executive, we are many. So, we are not discriminating against each other until the crisis commenced. And even when it commenced, CITN has not been discriminating. We have been accepting all those ICAN members who want to join CITN. We maintained open door policy in all our dealings. Nothing will happen to them (ICAN members who also belong to CITN).If they want to come, we will accept them. Any of our members who want to join ICAN is also free to do so. There is open entry, open exit. And the Constitution of the Federal Republic of Nigeria guarantees freedom of association. Nobody should restrict another. It is part of Fundamental Human Rights enshrined in the Constitution. So every body is free to join either ICAN or CITN.
When ICAN directed its members in CITN to withdraw, 18 of us refused to withdraw. When they were threatening to take disciplinary action against us, we approached the court that it is our fundamental human rights to associate. So, in that case, we got an injunction restraining them from taking any action against us. So the case is still pending. As I am talking to you now, we have so many members who are ICAN members in the CITN fold. So the same thing in ICAN, many CITN members are there. There is cross membership between both bodies. But you must realize that ICAN was part of the shareholders that founded CITN.
The foundational membership are mainly ICAN members and the Federal Inland Revenue Service (FIRS) employees. So there is no way you can separate both bodies. We are too close to be separated. Even twins themselves, they quarrel. At the end of the day, they settle. I think that is what is happening now. But by God’s grace, we will overcome it.
Is there any law prohibiting governor from appointing any other person as chairman of Revenue Board apart from CITN members?
The point being made is that a round peg should be put in a round hole. It is a clarion call for the professionalization of tax administration at the state level. In some states, tax administration is not being given the seriousness it deserves. It is being treated as job for the political boys. So the point we are making at the Tax Institute is that they should appoint competent tax professionals in these set of states in accordance with the law to make them do the job. The great job that is going on in Lagos tax administration today is because of the professionalization of their tax administration and nothing can detract from that. So this is an appeal to such state governors who may look for their friend who know next to nothing about tax administration because tax administration is a specialized profession. So it will better serve them when they are looking for adviser to look for those who are very competent in accordance with the law.
At the Tax Institute, I think that there are some things that will be beneficial to the industry of our concern. So it is left for government to decide whether to take our advice or not. I have given you example of states that are forward looking, states that have deliberate tax policy to advance the development of tax administration and the results they are getting.
With the respect to whether there is any provision of the law that states that only CITN members should be appointed as executive Chairman either of the Federal Inland Revenue Service or the State Inland Revenue Board, Section II of the FIRS Act 2007, the law that established FIRS as autonomous body. That section provides that whoever is to be appointed as the executive chairman of FIRS should be somebody experienced in taxation. How else can somebody be experienced in taxation without being a member of CITN. I can’t see it because CITN is the body regulating tax practice in Nigeria and this has been affirmed by Appeal Court. So you can’t say that you have experience in taxation without being a member of CITN. So, in other words, what FIRS Act 2007 is saying is that whether directly or indirectly, whoever is going to be appointed as the executive Chairman of FIRS must be a member of CITN. That is at the federal level.
At the state level, the law that regulates Inland Revenue Service is the Personal Income Tax Cap C8 (LFN) 2004. This Cap C8 was amended in 2011 for the state Inland Revenue Service. So the amendments there still affirms that whoever is going to be appointed as the executive Chairman of State Inland Revenue Service must also be experienced in taxation. And I think it states something of being member of relevant body. So what is the relevant body of taxation in Nigeria? Everybody knows that it is not NBA, NMA or CIBN, it is CITN. So the two laws I have cited are the relevant laws.
In addition, there is what we call Scheme of Service of the federation of Nigeria that is applicable to federal, state and local governments. In the Scheme of Service, anybody in the service of government and into taxation will be employed with CITN certification on Grade level 10. And the Scheme of Service prohibits any civil servant from rising above level 13 if he or she is not a member of CTN. So, it shows that government still recognizes that law concerning the membership of CITN as the only professional body that regulates the practice of taxation in Nigeria, either as tax practitioner or as tax administrator. It doesn’t make any sense if the lower cadre is being regulated by law that you should be member of CITN and then you bring somebody who is not a member of CITN to come and boss over those with CITN. It doesn’t happen in the medical field, it doesn’t happen in the legal field. That is exactly what I am saying. Apart from that. Section 19, which is the basis of this judgment, in the CITN Act makes it abundantly clear that only CITN member can practice Taxation as tax administrator and tax practitioner. Chairman of State Inland Revenue Service is a tax administrator practicing Taxation. So if the governor appoints any other person who is not a member of our Institute is violating that Act (Section 19).
CITN has been forthcoming in challenging state governors and authorities that violate the law as far as membership of CITN is concerned. We cannot be too confrontational. What we have not done is to take them to court. But we have been writing and protesting strongly. I wont mention a governor who appointed non-member. We have written at least three letters to make him realize that what he did was illegal. Some governors, immediately, we make them to realize this, change and appointed our members. Let me tell you, we cannot win this war in a day. It is a gradual process. One day, I believe common sense will reign supreme. And these governors will be reasonable and be law abiding to appoint only our members in compliance with the law. And I believe it will not get to a stage where CITN will start challenging such governors’ appointments in the court of law. But if we continue to appeal and that appeal is not heeded, the next thing is to challenge and test the efficacy of that law in court.