Political intrigues and 2023 presidency permutations are being fingered as the principal reasons endangering the re-appointment bid of the Chairman of the Federal Inland Revenue Service, Mr. Babatunde Fowler.
Fowler, who assumed office as Executive Chairman of the nation’s principal tax collection agency and Chairman of the Joint Tax Board on August 18, 2015 formally completed his first term in office a week ago but remains for all intents and purposes the subsisting helmsman at the agency until a decision is taken as to whether to confirm him for a second term or appoint a successor for him.
According to sources that Business Hallmark reached out to shed light on the issue, while the initial mood was clearly suggesting a no-return for Fowler, it is on account of the need to ensure that an appropriate balance is brought to bear on the matter in the light of yet unfolding political and economic developments in the country, that the presidency may have presently been compelled to beat a retreat in respect of the damning query issued the FIRS boss earlier on in the month.
It will be recalled that early last week, the internal memo querying why FIRS under Fowler had not met designated revenue projections had surreptitiously showed up in the public space.
In the text of the query that Business Hallmark perused, the Presidency, through the Office of the Chief of Staff, Abba Kyari, requested Fowler to explain ‘observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018.’ That was not all.
“Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the variances between budgeted and actual collections for each main tax item for each of the years 2015 to 2018.
“Furthermore, we observed that the actual collections for the period 2015 to 2017 were significantly worse than what was collected between 2012 and 2014.
“Accordingly, you are kindly to explain the reasons for the poor collections.”
And underscoring the fact that an exit script was being played out, Fowler was asked to respond to the contents of the memo before or by August 19 while also being directed to handover to the next most senior official at FIRS.
However, and as if on a tangent also, Fowler’s response to the query was similarly ‘released’ to the public in what observers say was a clear game of wits.
In the response, the FIRS chief laid the blame for the shortfalls at the doorsteps of falling oil prices and the consequent slipping of the nation into recession.
He also went further to suggest that rather than being pilloried for failings that very simply did not fall within his remit, he should rather be commended for steps taken to boost the nation’s non-oil revenues, expand the tax net and raise the tax to GDP ratio.
Conceding that actual tax collection since the beginning of President Muhammadu Buhari’s administration is lower than the 2012-2014 period under former President Goodluck Jonathan in general terms; Fowler however explained that FIRS under his watch had performed better in respect of the collection of non-oil taxes, such as VAT and CIT.
Arising mainly from this rebuttal and with eyebrows being raised as to what exactly was going on, as well as a fresh re-consideration of the broader fall-outs that were now veering towards the administration being seen in the public eye as being uncoordinated in such a critical area as revenue generation, the Presidency in a statement signed by presidential spokesman, Garba Shehu, now moved to douse the rising heat by denying that the FIRS chief was under probe.
“Following reports making the rounds in some media outlets, it is necessary to state categorically that the Chairman of the Federal Inland Revenue Service, Babatunde Fowler, is not under any investigation.”
“The letter from the Chief of Staff to the President, Abba Kyari, on which the purported rumour of an investigation is based, merely raises concerns over the negative run of the tax revenue collection in recent times.
“Consequently, it would appear that the country might be heading for a fiscal crisis if urgent steps are not taken to halt the negative trends in target setting and target realisation in tax revenue.”
“Anyone conversant with Federal Executive Council deliberations would have observed that issues bordering on revenue form the number one concern of what Nigeria faces today, and therefore, often take a prime place in discussions of the body,’ the statement explored. Curiously, the statement did not provide any answers for how what was ordinarily an intra-administration matter, had now become headline items in the public domain.
Asked to explain exactly what was going on, Tom Esegoni, a public policy space watcher explained that there clearly must be more than professional and performance factors behind the delay in re-confirming Fowler for a second term on the beat.
‘‘It is difficult to see what the problem is. He is doing the job they asked him to do. They asked him to make more and more money for them and he is doing it. And he has really been loyal at that. Except this is a show of sorts to send a message to some people and give the impression that something is amiss. But frankly, I think all of the hoopla is unnecessary and does not conduce to the greater goal of assuring economic systems stability which is much needed today like never before.”
The Presidency statement on the subject also confirms this view that Fowler may really have delivered in the critical areas that matter.
“It is noteworthy and highly commendable that under this administration, the number of taxable adults has increased from 10 million to 20 million with concerted efforts still on-going to bring a lot more into the tax net,” Garba Shehu had written. So why then is his confirmation being delayed?
Politics is not opaque
Feelers are that just like in the face-off between Oyo Ita and the presidency, the fight may very well be a signal of an even bigger rift. And as such, even if it is temporarily resolved at the moment, it could yet resume on another day.
A strong possibility of this is reinforced by the fact that Fowler’s query was signed by the Chief of Staff whom the President last week made the clearing house for all correspondence from the ministers. If ministers would pass through the Chief of Staff, would Fowler’s situation be any different?
But the stakes are high and everyone is watching. As Tunde Egbe, another policy analyst who spoke to Business Hallmark put it, this is a matter of high-wire politics and it clearly goes beyond the professional.
“It is high-wire politics. The stakes are really high. The real target in my reading is Tinubu and the 2023 presidency. His opponents know that the race has already begun and as much as possible they want to cut him down.”
Things are even more testy given that the man at the centre of it all, Tinubu, is clearly not keeping his eyes one bit off the big prize. Sources say he has literally relocated to Abuja in order to keep a detailed real-time watch on developments. Indeed, so focused is he on his Abuja assignment that Egbe says, he scarcely has time to personally intervene and troubleshoot in his home Lagos State at the moment.
Evidence of this some say is the recent rejection by the House of Assembly of three of the state Governor’s nominees as Commissioners and Special Advisers. Egbe says this could only have happened because Tinubu was too busy in Abuja and in his absence some of his lieutenants decided to engage in a show of force.
So would Fowler be confirmed?
Fowler, who had replaced Sunday Samuel Ogungbesan in office as Chairman of the FIRS, sources say, is yet hoping that things would yet be resolved in his favour. A seasoned tax administrator, he had studied at the University of Wisconsin, Whitewater, where in 1978, he obtained his first Degree, a Bachelor of Science in Economics and an accompanying minor in Political Science. He thereafter took a second Bachelors’ Degree in Business Administration at California State University, Los Angeles and a Master of Business Administration from California State University, Dominguez Hills both in 1981.
Post graduation, Fowler worked with Avon Products Inc in New York and Johnson and Johnson in New Jersey before returning to continue from there with a stint at Johnson and Johnson Nigeria. He subsequently switched to Banking, working, first with Commercial Bank (Credit Lyonnais Nigeria Limited) and thereafter Chartered Bank. He was a General Manager in Chartered Bank in 2004, when he resigned to become the pioneer Permanent Secretary/Executive Chairman of the Lagos State Internal Revenue Service (LIRS).
It is to his credit that Fowler reformed the LIRS and led it to achieve an increase in its internally generated revenue numbers. From an average of N3.6 Billion monthly as at January 2006, the numbers rose to a new average of N23 Billion monthly as at June, 2015.
It was clearly in recognition of his impressive performance as Executive Chairman, LIRS that he was to be appointed Executive Chairman, Federal Inland Revenue Service and Chairman Joint Tax Board by His Excellency, President Muhammadu Buhari, GCFR on 18th August, 2015 at a time when fresh revenue was greatly in demand.
His tenure at the FIRS has seen an increase of over 800,000 new registered (corporate) taxpayers. Also, as Chairman of the Joint Tax Board, he has helped increase the number of tax payers in the States of the federation from 10,000,000 to 14,000,000 in 12 months.
Amongst many other new initiatives, the FIRS under his watch has introduced and deployed several ICT driven initiatives such as the Integrated Tax Administration System that enables on-line filing of tax returns and the VAT-Collect system which has brought in the automation of collection and remittance to government coffers of VAT due from Airlines. There are also the e-Stamp Duty which relates to on-line stamping of documents and stamp duty payments, e-Tax receipt that enables instantaneous issuance of receipts for taxes paid and the e-Tax Clearance Certificate system.
Notwithstanding the harsh economic challenges during the year 2016 for example, Fowler led the FIRS to collect N3.3 trillion in Federal level taxes. In 2017, this moved to N4.03 trillion, and further on, in 2018, to N5.3 trillion.
Fittingly, the Heads of Revenue Authorities in Africa voted overwhelmingly at the 4th ATAF General Assembly in Durban, South Africa held in October 2016, to elect him as the Chairman of the African Tax Administration Forum, ATAF. He is the first Nigerian to lead the continental revenue administrators’ body which comprises Revenue Authorities from 38 African countries. He was to be re-elected for a second term as Chairman, ATAF, at the organisation’s General Assembly, in Botswana in October 2018.
A recipient of several awards and recognitions, which include Honorary Senior Member of the Chartered Institute of Bankers of Nigeria and a Fellowship ‘Honoris Causa’ by the Certified Board of Administrators of Nigeria, he is a Fellow of both the Chartered Institute of Taxation of Nigeria and the Chartered Institute of Taxation of Ghana. He similarly holds a Fellowship of the Business Management Association of the United Kingdom.
An indefatigable tax-man, the United Nations appointed Fowler as one of the 25 members of the International Experts Committee on Tax Matters on the 10th August, 2017. He was elected the 2nd Vice Chairman of the International Tax Experts Committee on 17th October, 2017.
Should Fowler not be confirmed for a second term in office, the options would be between bringing in an outsider to the position or elevating one of the senior directors within the system to the role. Should this be the preferred option, two of the names likely to feature then would be Peter B. Hena and Abiodun Aina.
Currently the Coordinating Director, Support Services Group, Hena holds a Bachelor of Science degree in Accounting and a Master’s degree in Accounting and Finance. He is a member of the Chartered Institute of Taxation of Nigeria (CITN), the Chartered Institute of Purchasing and Supply Management of Nigeria (CIPSMN) and Fellow, Association of National Accountants of Nigeria (ANAN).
He joined the Federal Inland Revenue Service (FIRS) in 2009 as Deputy Director, Procurement and became Director, Procurement Department in 2010, a position he maintained until September 2013 when he was elevated to the position of the Coordinating Director, Support Services Group.
As the Coordinating Director of the Group, he has supervisory oversight over the Human Capital Management and Development, Finance and Accounts, Revenue Accounting, Facility, Security and Safety Management and Procurement Departments.
On his part, Aina is Coordinating Director, Domestic Tax Group/Special Advisor to the Executive Chairman of the Service
A seasoned finance and investment manager with over 20 years post qualification experience in auditing, taxation, banking and business advisory services, Aina is a fellow of the Institute of Chartered Accountants of Nigeria; Associate Member, Chartered Institute of Stockbrokers and Associate Member, Chartered Taxation Institute.
Hailing from Kwara State in North Central Nigeria, Aina holds a Master’s Degree in Banking and Finance from the University of Lagos. He had started his professional career with KPMG in 1982 and left as Senior Auditor in 1988 to join First Interstate Merchant Bank where he rose to the position of Manager and Head of Treasury before joining Associated Discount House in 1993 as the pioneer Assistant Chief Dealer.
He left Associate Discount House in 1997 as Senior Manager and member of the company’s Executive Committee and subsequently worked with Baccad Finance & Investments Ltd as Head of Accounts where he acquired the pre-requisite experience required to become a Dealing Clerk on the Nigerian Stock Exchange. He later qualified as a stockbroker (ACS) in 1997 after which he founded the accounting firm of Abiodun Aina & Co. (Chartered Accountants).
Aina also served in Reliance Bank Ltd as Deputy General Manager and was at various times in charge of Treasury and Financial Institutions and Head, Corporate and Investment Banking division of the bank.
He returned to professional practice in 2002 with special focus on taxation, thereby having about 13 years continuous practice in taxation before his current role.
He was appointed the Special Advisor to the Executive Chairman, FIRS in August 2015 and along with his advisory role, he equally serves as Coordinating Director of the Domestic Tax Group of the Service.