The Akwa Ibom State Commissioner for Finance, Mr. Akan Okon, in this interview with AFRICATELL gives detailed explanation on the recent tax administration in Akwa Ibom state, the 2016 budget proposal, among other issues. Excerpts:
Can you please give a brief breakdown of the 2016 budget proposal as presented by the Governor, Udom Emmanuel to the state House of Assembly?
The budget of the state as presented last week by the Governor of the state Mr. Udom Emmanuel to the state House of Assembly, we are looking at the budget size of N426billion and just like in the previous years, that budget is looking at having more money budgeted for capital expenditures and the balance will be for recurring expenditure.
Precisely, the ratio is about 72 per cent capital expenditure and 28 percent for recurring expenditure.
What has been done differently from previous budgets?
Well, what you saw in the presentation is a reflection of the current realities. You know the budget for last year was about N485billion, there was a reduction of about N70billion from the previous year’s budget. That is basically because of the economic situation that is facing the country and us as a state. The revenue that is accruing to Government has been coming down in the last few months as a result of what is happening in the international oil market, the falling oil prices; that has affected the revenue and as a result of that, our budget has taken into consideration the revenue that will be coming and then we have also considered the Federal Government price benchmark of $68 per barrel of crude oil and the production level of 2million.
Basically, the budget as you all know is estimate and is actually when we implement it because we don’t have control over our sources of revenue…one of them. But the other aspect of it, the budget vertically appropriates revenue from vat and the IGR. As part of IGR, we are putting everything in place to make sure that the system is efficient and effective and that all moneys that are due to Government is collected and brought to Government purse for developmental purposes.
Why has the Government refused to pay salaries to the newly employed workers in the state?
Well, for Akwa Ibom civil servants, that have been legitimately employed, they receive their salaries as at when due but I like to point to you here that there were a lot of issues involved in the last recruitment exercise. An approval was given for a specific number of persons to be employed but the employment was done about 150 per cent above that number and we also found out that it was like a racket, certain persons were going around with fake employment letters.
Government has set up a committee to look at all these issues with a view to separating those who have been genuinely employed by Government from the fake ones and as soon as that is done, the genuine one will receive their salaries.
Approximately, how long will this investigation take?
I think it is not going to take long because they have already gone very far. It is widely rumored that the state Government took a loan to pay workers salaries in the state; if this is true what is the justification for such sir?
I will like to tell you that Akwa Ibom state Government under Udom Emmanuel did not participate in the federal Government bailout programme for the purposes of paying workers salaries but workers salaries are paid based on revenues that accrue to the state from federal allocation and Internally Generated Revenue. I must emphasize; we did not take loan to pay workers salaries and we did not take part in the federal Government bailout programme for the purpose of salary payment.
Why did the state Government skip out of the bailout programme of the federal Government?
You know that the Governor is a financial expert and in business, you don’t take loan that you don’t need. It would not be wise if our revenue can at least match the payment of salaries then we still went for the loan. There would be no need to pay interest on what can be avoided. I think it was for financial reasons because it is not good for us to keep taking loans for what can be handled with available resources Despite the noise about pension payment; some pensioners are complaining of nonpayment of their pension for over three months now, what is responsible for this please?
I think Akwa Ibom state pensioners are very happy with what the Governor, Mr. Udom Emmanuel because it is on record that pensioners were not paid their pensions and gratuities for over 13 years, but on assumption of office, he immediately ordered and made provision for the payment of outstanding pensions and gratuities for the last 10 years to be paid. That has been paid, the remaining portion, they are working out modalities with the view to ensuring that that payment is done. And I am sure that in not very distance future, that will be a forgotten issue.
We also found out that there were some issues, just as we have with the newly employed civil servants. We are putting modalities to ensure that the moneys we pay actually go to the pensioners. So as I speak to you, we are carrying out audit to know the pensioners that we have in the state with a view to ascertaining the exact number of pensioners and civil servants in the state. Because with the way we are going, that the resources that accrues to the state is coming down every month, if that is not ascertain, we will continue to pay salaries one person at five pay points and there may not be money to pay to genuine civil servants in the state that are actually working.
That exercise is ongoing and I am sure, by the time that is done, all those that have outstanding will be paid. Presently, pensioners and civil servants are being required to submit their bank verification numbers because as you all know, each individual is entitled to one and we believe that it is going to help the system to significantly streamline the number of people that are actual civil servants and pensioners.
To the average man on the street; the Governor has removed money from workers salaries; can you give exposition to the taxation policy that is being implemented in Akwa Ibom state?
Every responsible worker, whether in the civil service or private sector, has the obligation to pay tax and when we are talking about taxes that individual that are working pay; we are talking about the pay as you earn and this is guided by the personal income tax which is normally enacted by the House of Assembly and in Akwa Ibom state, what we met on ground was the implementation of personal income tax of 2004 meanwhile, there was a new law that took effect from 2011 and we had issues even with the developing partners and developing agencies that are in position to assist the state Government on developmental projects but they found out that we had so much money hence we were not implementing the relevant tax. We believe it was to that end that we had to implement this law in Akwa Ibom state because; out of the 36 states of the federation; Akwa Ibom was the only state that that particular tax was not implemented.
The Governor, being a humane person and has interest of his workers at heart approves that the civil servant should continue to enjoy 50 per cent of the tax that they are supposed to pay and I want to explain here so that people will not turn it to something else; rebate means; if you were supposed to pay N1000 as tax, Government says; pay N500 instead of N1000. That means, Government should be commended instead of all negative criticism that we are hearing from every way. And it is a civic responsibility. That is the issue; Government is not taking money from civil servants. Civil servants are only paying taxes which are an obligation every employee; whether in the public or private sector must oblige.
You said that much attention has been given to capital expenditure on the budget; can you please emphasize on the areas that you think the budget has really receive attention?
Yes, you know that Government is a continuum, the previous Government build a good foundation that the Government of Udom Emmanuel is relying upon to move the state forward mostly in the area of infrastructure and there is no society that can say that it has enough infrastructure because every society is evolving from day to day. The number of people that you had in Uyo in the last two years, I’m quite sure is not the number today. So at every given point in time, there is pleasure on the infrastructure. Even as a country, we have what is called infrastructure deficit same thing is applicable here and we will continue to construct new roads, because we won’t say that every local Government, every community in our state has good roads. It is going to be a continuous process and this is one of the requirements that is necessary for industrialization because, if you have an industry cited in a particular location, may be as a result of nearness to the source of raw material; there must be access roads so that the finished product can be conveyed to the final destination where it will be utilized. To that extent, moneys that are allocated to capital expenditure could be used for road construction and there were ongoing roads that were not completed, they need to be completed and some other items that are required for upliftment of the lives of the people.
What programme does the current administration have in place to increase tax returns?
Like we all know and what I have said before, we do not have control over the revenue that come in from the federal source but we have control over the IGR because we can make deliberate policy and take deliberate steps with the view to increasing our revenues from these angles, so what we have done; we have a new consultant that has deployed a new soft way and we believe is going to block all the leakages associated with the revenue collecting system and above all; we want to make the system very efficient and effective and that payment of taxes shouldn’t be so difficult you should be able to walk into the bank and pay taxes with ease. We believe that when this is completed, it is going to significantly affect our revenue. We are also looking at increasing our tax née by engaging people in the informal sector with a view to bringing them to the tax platform.
Because I can tell you, there are a lot of people, a lot of businesses that are operating in the informal sector in the state that are not within the tax née. So we are embarking on a massive awareness campaign with a view to letting the people know the reason why they should pay their taxes and then we will take it up from there and I believe when this is done there going to be a significant improvement.
What is the current internally Generated Revenue (IGR) in the state?
I G R is not certain, it swings depending on the season but I believe that on the average; its revolves between N1.3 to N1.5 billion but I believe that with what we are currently doing, by the time we are through, we are going to be having a minimum of N2billion because we are increasing surveillance on some of the oil service companies operating in the state and the issue of assessment is taken seriously so that people can have proper assessment and the issue of underassessment is eliminated. I believe that what we have currently will be moved to a far better figure in the near future.
What are the strategies put in place to ensure public private partnership in the state?
For Public Private Partnership to be successful there must be accountability and there must be transparency. You can bear witness that Government of Akwa Ibom state under Governor Udom Emmanuel is doing everything possible to strengthen accountability in the way Government business is being done and that has been responsible for why we have seen so much interest by investors to come into the state.
The state Government is determined to continue to provide an enabling environment to encourage people to do their business. To that extent, Government would strengthen all institutions and relevant laws that will give room for Public Private Partnership to thrive.
In case of a rerun election in the state; don’t you think that none payment of salaries to the newly employed civil servants will cause the Governor to lose the election?
As I explained earlier; you don’t build on nothing; the issue of employment into the civil service have been disabled by fraud. There is no right thinking Akwa Ibom person that will allow moneys to be paid to those who are not qualified to be in the civil service. Let me tell you that some of those that were given appointment letters never had their secondary school certificates but they have offer letters for graduate positions. I believe the right thing should be done and Akwai Ibom people I know would want the right thing to be done and won’t support anybody to commit such fraud because they want to be in the civil service.
That is the truth, and as I am talking to you now, you are all voters and I don’t believe that the issue of not paying money to people who committed fraud to enter the civil service would stop you from voting for Udom Emmanuel assuming there is a rerun. Because I believe and we all know that he has done well within the last six months that he has been on the saddle and I believe, given the opportunity, that he will take this state to a level that all of us will be proud of. We cannot allow people out of selfish interest to stop us from doing the right thing. I don’t think that can be a major issue because none of us here would support any fraudulent activity in law.
Will culprits of this saga be prosecuted?
Well, I think there are consequences for every action that we take in life, there are rewards; if you do good, you get good reward, if you do bad, you get bad reward. So for whatever the consequences for such action; I believe that is what will happen.