Babatunde Fowler, chairman, Federal Inland Revenue Service (FIRS),
has dismissed the claim that the FIRS, awarded huge contracts to a young
company: Active Solution Integrated Synergy without following procurement
process.
Fowler told the
Ad-Hoc committee
on procurement that the emergence of the company was on account of the national
revenue emergency, which demands that FIRS thinks outside the box to generate
enough revenue for the nation.
“The
proposal from Active Solution Integrated Synergy Ltd, came at the nick of time
when FIRS tax revenue collection was nose-diving as a result of the recession
in the economy and the perpetual fall in crude oil prices which exerted more
pressure on non-oil revenue,” Fowler said.
“Government
set high revenue targets which FIRS was expected to meet. FIRS was determined
to pass the litmus test set by the high revenue target and is poised to provide
succor to government funding challenges.
“This
FIRS did by declaring state of emergency in tax revenue collection. The
strategy adopted by FIRS to boost tax revenue collection was to deploy more
automation in the tax revenue collection machinery to deepen the already
existing automated platform and catch transactions which may have escaped the
tax view before now.
“This
trend prompted FIRS to adopt automations that facilitate handshake with some
specific sectors of the economy. As we are all aware, telecoms sector is an
area that the transactions are not very open to many and there has been no
lucid knowledge about revenue presentations in-spite of the much accountants
have been able to report. This is attributable to the total automation of their
operations.
“The
only way to crack into such systems was to allow for operators who understand
the terrain to lend a helping hand with a view to achieving more tax revenue.”
In
continuation of this drive for automation, Fowler said FIRS launched the
following solutions recently e-Registration); e-Stamp Duty); online payment:
e-tax pay, Remita); e-Receipt); e-filing) and online Tax Clearance Certificates
(TCC).
The
FIRS Chairman however explained yesterday that it acted in national interest on
a contract that will give Nigeria more revenue, yet was at no cost to the
nation.
In
other words, if Active Intelligence generates no revenue from its VAT recovery
efforts, it is not paid a dime.
He
explained too that it was for a company that had the sole expertise on the
technology and telecoms calls audit that had never been done in Nigeria. The
company also had a track record in UK and about 10 countries in Africa,
including Ghana.
The
contract was at no cost to the nation, as it had no financial commitment or
upfront payment to the consultant.
Rather,
Fowler told the committee, companies given contracts on recovery of VAT on
International calls on telecoms were to be paid only 1 % of the value of the
money they generate.
This,
he noted was better than the old practice, where consultants were paid for such
jobs either they pull in money or not.
“What
we did was that we sought out companies with history and demonstrated expertise
in ICT sector for which there are no demonstrable expertise available locally.
“The
proposed solution is an intellectual property of Active Intelligence Ltd and
the company has exclusive rights over the solution. FIRS engaged the company
given its expertise and experience to deliver and also given experience of the
Directors and Technical Partners of the company
“The
company went through a process six months before agreed that it has value and
experience to add value to our job. The company showed us what it had done in
Ghana. It was novel and it had not been done in Nigeria. The UK company is
called Active Intelligence Limited. It has established itself as a leading ICT
company in Africa and has a presence in Ghana and 10 other African.”
Fowler
told the committee that the Nigerian arm of the company was registered on
December 2, 2016 and was awarded contract on January 23, 2017 to deploy IT
solution to deduct VAT on Telecom companies.
“In
agreeing that the company should handle the VAT audit of telephone calls, we
also considered other benefits like technology transfer and development of
local knowledge. We then insisted that the company must be registered in
Nigeria. It did with.
“We
took them through the Procurement process. It was a technology exclusive to
them. And Section 42 (1) a & b of the Public Procurement Act allows us to
do that.”
Olusola
Oke, the Ad-Hoc committee chairman, noted FIRS’ bid to generate more money for
the treasury so the nation could spend its way out of recession
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