*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
(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
(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
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
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
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.
Executive Chairman, KW-IRS.
September 16th, 2020