 You're welcome back. Right now, we're going to be talking about what the federal government intends to do. They say there's always been a yearly tax loss of 20 trillion naira, and the federal government has begun reform to end these. And to talk with us, we have Mr. Bolahan Olujide, a public policy analyst here in Lagos State. Good morning, and welcome to the program, Mr. Olujide. Thank you very much. Nice to be on the program. Okay. Now when we talk about losses being incurred by the government, 20 trillion is not a small thing. First of all, what gave rise to these losses, tax losses yearly, to the tune of 20 trillion? Okay. In our tax system, there's a huge collection in the fishes. A lot of people pay what they think is taxes, but these things are actually extortion and not taxes. So it doesn't go to the government, it goes to other parties. The other things include the fact that there are so many agencies of government at various levels that are collecting some of this payment. So some of them are absolutely incompetent at what they do. I'll give you a very good example. I remember a friend telling me about how a local government has brought a radio and television license fee to his office for about, I think, 100,000 naira. And he was like, what exactly is this supposed to be for? And then he gave the guy 10,000 naira cash to put it in his pocket. And that was the end of that taxation. And that happens at various levels, including what I'll call the official, more official collection windows of the government. So a lot of money are being lost every day via all sort of collection, corruption and collection inefficient. So it leaps away. The fact that there are multiple ways of collecting, multiple agencies involved, and multiple taxes, there are probably over 60 different taxes at various levels in Nigeria. So when you have such an unstructured tax environment, a lot of the money never gets into government coffers. If you check PE, which is closer to all of us, there are a lot of companies that deduct PE from their staff. They've already deducted it from the staff salary. But they don't give it to government, they just give it in their books. So if we structure this taxation better, reduce the number of taxes and the number of agencies that are involved in all this collection, generally improve the collection environment that collection efficiencies will develop most of those liquefied and be able to get more taxes for the government, even without increasing tax rate. Because there's a common belief that the only way those taxes would come up is if we increase taxes. Tax rate increase is the last on the list of getting more taxation into government coffers. Okay, so what the federal government is mulling now is that in the point newspaper, for instance, we have federal government based top customs NPA 61 agencies from collecting trillions in revenue. And we also have that same story on Daily Trust and FIRS said to take over 63 agencies tax collection mandate. Presidential committee is the one saying that. So are we expecting another Alphabeta in the nation? Alphabeta is a private agency. FIRS is the agency of government charged with tax collection. So those are two different situations. The reason for the question is that does FIRS have the capacity to take all these taxes? It should have. If it doesn't, it can acquire that capacity. It is part of the problem in tax collection in Nigeria. Most of those taxes that are collected by all these 1001 agencies of government, a chunk of those taxes are not going to the right pocket. We need to have a proper structure for tax collection. Apart from the efficiency, there's also the graft. I'm not saying that even FIRS itself does not have a lot of work to do when it comes to even graft issues. But you see, it is easier to work out a more effective system when you have a centralized agency and lean back. If I want to drive technology, for example, for collection, it is easier to do it when I have a single agency that is collected. Then when I have to deal with how to make all the various platforms across 10001 agencies to work together and deliver on the taxation policy that I desire. So that is why making FIRS the chief collector is a better deal. Anybody who has to deal with some of these other agencies that we are talking about will tell you exactly how inefficient these guys are at collecting those taxes. And if you are even talking of custom duties, for example, the kind of things that are going on with custom duties are unbelievable in terms of grafts. So I think that it's a more streamlined approach. I think it makes it easier for deployment of technology. It makes it easier for us to give it a focus. It makes it easier to streamline the 60 taxes or more that we have into a single window. Imagine some of these things so that a business owner, for example, does not have to be accountable to so many different agencies of government when it comes to the taxes that he has to pay. If I ask the taxes, look at the taxes for if your building is close to the ocean or to the sea in Lagos State. So Lagos State will ask you that the waterway tax. And then FIRA will come back again and ask you about the same taxation. And Lagos State will tell you that it is different. The waterway agency is different from the FIRA government waterway agency. So these are the kind of situations we must streamline to reduce the burden of multiple taxation and improve collection efficiency for taxes in Nigeria. Okay. You did mention something that we need a good tax collection structure. What would you describe as a good tax collection structure? It is that we do not need too much taxes on the table from collected. What we have right now, I have a favorite example of talking about taxes. If you take personal income taxes in the United States, the top 1% in us contributes approximately 40% of the personal income taxes in the US. In Nigeria, it is almost the opposite. The top earners, a lot of them don't pay anything. And a lot of them will pay as if they are fresh, gradually just hired as a tailor in the bank. That's the kind of tax. When you go and check the kind of taxes that some people or presidential candidates paid, when you go and look at the funding field and see the taxes they paid over the last three years, you will be embarrassed. A lot of top earners in Nigeria are not even paying the taxes. Whereas those top earners contribute 40%, like I said, of personal income taxes in a jurisdiction like the United States. So it is important that the collection efficiency improves significantly. Otherwise, we will keep on chasing only a segment of the market. And those are the only people that will continue to carry the unfair burden of taxation in Nigeria. If you talk of personal income taxes, there are the people in that salary bracket because their taxes are deducted before you give them the next. So those people carry a lot of weight. But the income of a politician or some other business people who are not in a structured kind of business, how do they, how do you, how much of their taxes do we actually collect? I remember the last head of FIR told us how many Nigerians are paying up to, I can't remember what, 10 million taxes in Nigeria. And he found out that in many states, no, there are many states where nobody is paying that level of taxes. If a legal state consumes the highest number of people contributing to that level of taxes. And it is not as if there are no billionaires in all these others that the question is where are their taxes? Okay, well, another issue is I asked the question, if FIRS has the capacity, you said even though they don't have the capacity, they can have the capacity. How do you think they should do this? Because I don't know, do you propose that they recruit people that will be able to do this? Or they co-opt some other agencies which will bring us to almost the same place that we are right now, having multiple agencies working and all that. What is the best way to go for them to acquire the capacity that they need to drive this process? As far as the technical staff, I'm a member of the Institute of Terrorization of Nigeria myself. I virtue of certain finance fraud that I've occupied. I've had to do the tax office. They have competent technical people to understand taxation. You're not likely to find a collection of that number of technical people in the collective agencies. In fact, in some of the collective agencies, the knowledge of taxes is minimal. This requires the responsibility of collecting taxes. So what we need to do with FRS is to revoke the capacity. So maybe they have 10 people working in this station and we need to make them 12 or 30. Let's do that. But most of the work is actually going to be driven by technology, not even human. So you have human beings with the right level of technical competence addressing issues that require human intervention. And you have technology driving all those parts of our collection that don't require human intervention. So this is the way it's going to run. Definitely, by the time FRS takes over, we will have more responsibility in doing more resources. And the resources are here. So we seem to be having problems with the audio of Bola... Why are they? What are you going to stop us in this situation? Go on, please. Okay. Well, let me just ask you a final question. We seem to be having some audio problems. We do hope that it will correct itself. Let me ask you this, Bola Hon. Will the exchange rate in any way affect this move by the federal government to whatever they're trying to do in the tax collection, will the exchange rate affect it in any way? Right now, a dollar is selling for 917 Naira in some places and in other places like Lagos, maybe 850 or something. So do you think this reform that the federal government is trying to put into tax collection will be affected by this dollar rate? Not in the short term. Not in the medium term. In the short term, there is no direct effect of how you collect your internalization and the foreign exchange rate. However, where it's been packed is that if your collection efficiency of taxation improves and you're able to collect more at a lower cost, then you have more pool of funds to spend as government. So government can be able to deploy more funds to issues around production. So you create infrastructure, it makes production much better and businesses to do well. You are able to invest in power in production and the more we start to produce and have more products to offer the world, the more we are in charge of the stability of our currents. Well, as of today, where we live in the country, the other time I heard people advocated that conventionally expand on the three items on the ban list for foreign exchange assessment through the CBI window. But when I look on the list of that for the three items, there is two to pick there. So which means we are still a country that thinks that we should be voting to pick and I can't understand that. So the only way it will impact is that if we're able to use the money, deploy the money that we're going to make from taxation to make it in the right environment for businesses to try to create infrastructure that will enable production so that Nigeria will reduce dependence on importation on one side and at the same time be able to reduce and export any benefits within Africa and foreign exchange. When our foreign exchange and is moved away from being 90% dependent on crude oil, we will improve our capacity to stabilize the Naira. But in the immediate there is no direct correlation between collection of the internet taxes and the foreign exchange. Okay. Well, thank you very much, Mr. Buolahono Lodgede for coming on the program today and helping us make sense of what is happening right now. The reform, we do hope every policy that has come will give us the air to breathe because that's the raining thing now, let the people breathe. And we thank you so much for your time this morning. Okay. That was Buolahono Lodgede, a public policy analyst talking to us from Lagos State here. We'll take a short break when we return. We'll be looking at how adoption of technology can help businesses in Nigeria to navigate in times of inflation. Stay with us.