No blackmail will stop ongoing reforms: KW-IRS Chairman
*Welcomes ICPC probe of own activities
Our attention is drawn to a cocktail of misinformation, mischief, and outright falsehood contained in an alleged petition to the ICPC by a group on the lawful activities of the Kwara State Internal Revenue Service (KW-IRS). Having gone through the article published by an online platform, since the Service is not aware of any petition against it before the ICPC, the following four issues were raised:
(1).non-existence of MOU between the Service and the service provider (consultant), Compumetrics Solutions Limited (CSL);
(2). that the said firm was being paid humongous sums without any record of service delivery to the KW-IRS;
(3). that the KW-IRS was not in full grasp of relevant tax laws as per Value Added Tax or the Withholding Tax as they relate to its operations;
(4), and, finally, that the agency has not been publishing details of IGR, which, according to the group, means that the KW-IRS is being run in secrecy.
While the agency awaits invitation from the ICPC in the event that any petition was indeed forwarded to it, it owes an obligation to the tax-paying Kwara public to clear the air on the issues raised.
(1). The new leadership of KW-IRS inherited some consultants who supplied what was known as Amanda software. But it was on record that the (Amanda) solution was not being used by the Service. An initial assessment was carried out with questionnaire issued to staff of the service at the inception of this administration and all respondents claimed that the solution was not working or beneficial to the Service. The outcome of the survey affirmed that the solution was not efficient. In an attempt to resolve this issue, the platform providers were invited on 11th October 2019 to defend this position and, after deliberations and their acceptance of all the issues raised, they promised to resolve all the issues within two months. But the issues kept reoccurring and new ones developed even after the two months had lapsed. The system finally collapsed and users were locked out on 21st December 2019. The Service was only able to salvage the data by the proactive action backups done in-house at the inception of this administration.
The new leadership, which assumed office in October 2019, had seen the problem coming along with other irregularities that were at variance with the policy thrust of the new administration. It had therefore kick started a process to engage new consultants in line with relevant laws of the service.
The new leadership developed a Technical Request for Proposal which was sent to five different platform providers, listing all the expected deliverables of the required platform for efficient running of the Service.
There were submissions of proposals and assessments of same were carried out by an internal team comprising all the necessary stakeholders in the agency, including representative of the audit department.
All the five firms made presentations to the team after which two were shortlisted for further clarifications and negotiations in line with global best practices. The KW-IRS team signed off at each milestone for the sake of due process.
All things considered, the CSL was finally selected as the new consultants and the MOU was developed which was duly signed and executed between both parties. The Service has full records of this rigorous process. The CSL, an household name in Nigeria’s tax consultancy industry, works in various states of the federation. We wish to state that the CSL was engaged only after the former Consultant’s contract was terminated.
For the sake of posterity, we want to place on record that that was the first time since KW-IRS was established that the Agency was having a rigorous and transparent process to select its consultants.
Indeed, there are pending cases of the Agency not having consultancy agreements/MOU on record to justify some payments to the former consultants. This administration is proud to have done things differently. It is therefore false to say that there was no MOU between the agency and the CSL. Compumetrics Solutions Limited was selected as platform providers to KWIRS after a rigorous selection process.
(2). The group also alleged that Compumetrics is getting paid for doing nothing for the KW-IRS. Nothing can be so far from the truth. The Consultants has deployed IT infrastructures with both front and back end interfaces.
The back end interface has been deployed since January, 2020, which involves the integration of the platform with all the payment platforms, solutions providers’ systems, and all the collecting banks platforms.
Some of its services have included training of 26 project members, mapping and documentation of current processes; conducting sessions with Process Owners and Subject Matter Experts (SMEs) on Process improvement and merging of similar processes which have reduced the number of business processes and documentation of same; data cleansing and stratification;
Completion of key modules and test running on the Platform; Development of template for the online receipt and Inventory Management System for the Store process.
The consultants also consolidated all liabilities for Banks and Petroleum sector for Debt Recovery; developed a debt profile template for the use of revenue generating Directorates; and developed SMS and Email notification to taxpayers as well as deployment of POS machines for collections.
It is important to state that this administration has been very prudent and conscious of the need to manage public resources. Prior to this administration, the payout to consultants at KW-IRS was at some point about N3.5b in one year — whereas the current consultants have only been paid N357m since the inception of this administration.
Worse still, the former consultants were paid fees on total collections, instead of what passed through the system, a clear violation of their agreement. They were getting paid for solutions not provided. The former consultants had a practice of not submitting invoices for work done; rather, directive to pay them came from the Executive Chairman’s office. Cases of this are also on going with relevant anti-graft agency.
For the sake of transparency and prudence, there is a variety of payment options now, compared to the previous platform.
(3): The group also talked about the issue of Withholding Tax and VAT deducted from the invoice. The basic response is that VAT as at January 2020 was 5%, while the 7.5% VAT regime only started in February 2020. The Withholding Tax (WHT) can be either 5% or 10%, depending on the business name of the company. That is the position of the extant law.
(4): The group also claimed that the KW-IRS has not been releasing IGR details even on its website. This is another lie. Information on IGR collections for Q1 and Q2 2020 is on the KWIRS’ website and all our other online and social media handles, which detailed the performance on IGR collections. The KW-IRS only recently just issued a press release to that effect on July 23rd, 2020. Details about IGR figures for the whole of 2019 are also on the website and were released at various times in the budget implementation report.
Having said the above, the KW-IRS is aware that the ongoing reforms of the present administration will not go unchallenged by some forces, internally and externally, for whom the agency was once a cash-cow! But the new leadership of the KW-IRS is fully aware of the enormous trust reposed in the new administration of Governor AbdulRahman AbdulRazaq and the need to do things the right way. That trust will be guided jealously!
Finally, the Agency welcomes the ICPC or any probe of its activities for the new leadership has nothing to hide or bother about other than its integrity and the general good of the Kwara public.
Mrs Shade Omoniyi
Executive Chairman, KW-IRS.
September 16th, 2020