Over the past few months, there have been narratives on how Kwara State Internally Generated Revenue Service (KW-IRS) “aggressively increased” the state Internal Generated Revenue (IGR) in 2016. While I acknowledged the increase in the state IGR in 2016, I believe there is a need to correct some misinformation embedded in the narrative and let Kwarans and other necessary quarters have empirical understanding of what really happened with Kwara State IGR and why such narrative should be reconsidered. It is pertinent to understand that one of the beauties of education is being able to form opinions from informed knowledge.
On several occasions, I have had people hammering on this “aggressive increase” without providing empirical analysis vis-à-vis the dynamism of IGR in the state before the years they are using as yardstick and justification to give credence to their narrative. This article is not about giving a knock on anyone’s head, but it is set out to give a more logical insight into the state IGR vis-à-vis logical analysis of the available empirical data. I have decided to make some personal findings by checking the search engines to gather more information on the IGR figures in the state between 2010 and 2019. And as such, I have been able to find out some information about the state IGR figures which I would be reeling out in the subsequent paragraphs because there is need to make some verifiable clarifications and logical submissions. I would like to enjoin you to read and carefully assess my submission with open mind because it is not targeted at underscoring the financial and management prowess of the former Governor, AbdulFatah Ahmed.
Before the establishment of Kwara State Internal Generated Revenue Service (KW-IRS) in 2015, Kwara Board of Internal Revenue (KW-BIR) was responsible for the administration of tax and related matters on behalf of the state government. And before it was scrapped in 2015, records showed that the board has been having some geometric increase in the IGR except for 2014.
In 2010, the KW-BIR generated ₦7.3bn and in that year, Kwara state was ranked 10th among the other 36 states of the federation. In 2011, K-BIR on behalf of the Kwara State Government generated ₦8.82bn as revenue. This shows 17.2% increase from 2010. Also, in 2012, KW-BIR accounted for ₦11.2bn as generated revenue. This implies that the board made 27.0% increase when compared to 2011. In addition, on behalf of Kwara state government, the board generated ₦13.84 in 2013. When compared to 2012, there is a percentage increase of 23.6%. In 2014, KW-BIR generated below what was generated in 2013, the board generated ₦12.46. This shows 10% decrease in what was generated in 2013. Following the aforementioned, revenue generation it is evident that the state had 27.0% of its revenue generation between 2010 and 2014.
In 2015, the board announced that it made ₦7.2bn as the IGR for the year. This was generated between January to June 2015 before the KW-BIR was scrapped. While it is worthy to note that the law establishing KW-IRS was signed on June 22nd 2015, in the same vein, KW-BIR ceased to exist. If we correctly assume that KW-BIR could have generated the exact amount between July to December 2015, it means the KW-BIR would have generated ₦14.4bn — again there’s a percentage increase of 20.8% from the 2014 figure. However, this assumption may not be correct as the figure may be higher because the second half of the year, all things being equal, often (or sometimes) brings in more revenue.
So, the important question to ask ourselves is what could be responsible for the 42% decrease in the IGR for the year 2015. Careful examination shows that if we are to accept ₦7.2bn as the IGR for the year 2015, that means for the year under review, the 2015 IGR would be ranked low. Does that mean the IGR for the state during 2015 was under-recorded? I am still finding it difficult to understand the reason for the sharp decline in the IGR for 2015. I am open for any justifiable reason(s) for that sharp decline to the tune of 42.2% as I believe it would give intellectual and logical credence to the narrative of 141.7% increase of the state IGR being propagated by some quarters.
It is worthy to note that, the major revenue contributors to the taxes and levies of the old board are the KW-BIR itself, Bureau of Land, Ministry of Finance Incorporated, Ministry of Health, Ministry of Agriculture and Ministry of Education. Notably, PAYE was strong and stood out as a major source for the State IGR.
In addition to the account on IGR figures in the state, in 2016, for the first time since its inception in June 2015, KW-IRS announced that its agency generated ₦17.4bn in 2016 on behalf of the Kwara State Government. This shows that on the ₦7.2bn announced for the year 2015, there is 141.7% increase; however, on the assumption that the agency would have generated ₦14.4bn in 2015, there is 20.8% increase. In 2017, KW-IRS on behalf of the state generated ₦19.6bn for the year. This shows 12.6% increase when compared to 2016. In 2018, ₦23.1bn was generated by KW-IRS; again, this shows a 17.9% increase as against 2017 figure. Lastly, KW-IRS in its bid to continue mobilising revenue for the strategic development of Kwara State generated ₦30.6bn as IGR for the year 2019. This represents a 32.5% increase when compared to the 2018 figure.
In summary, KW-IRS did not take the state’s IGR from ₦7bn in 2015 to a whopping ₦17bn in 2016. Also, the geometric rise in the figures between 2010 and 2015 except for 2014 shows a trend in revenue collection and economic situation. If services in 2010 cost a little higher in the following year, it is natural that tax from the service will be higher. It is a logical trend that shows no magic was done.
Secondly, another logical justification for the rise in IGR of Kwara in 2016 is that the establishment of the KW-IRS and the institution of Treasury Single Account (TSA) around the same time was what brought the revenue collection from the state’s tertiary institutions under the newly created KW-IRS. Until 2016, fees and all sorts from institutions were not being paid to the KW-BIR. In addition, some taxes or remittance collected by Local Governments in the state weren’t collected by KW-BIR prior to 2016. More importantly, the ₦9.8Billion of the total ₦17.4bn reported as 2016 State IGR were from sources that the old board was not reporting as IGR for the State. Now do the arithmetic, would you still tell Kwarans if the justification for the rise is empirically correct? How I wish those propagating the narrative of the “aggressive increase” of the state IGR in 2016 can tell Kwarans the answer of their arithmetic calculation.
For the sake of posterity, people should be sincere enough to properly situate things and not make heroes out of villains. It is not fair to history or to the younger generation who might not know anything about KW-BIR and what it was generating before the establishment of KW-IRS. Facts are sacred and our conversation on state matters must reflect such. The only time Kwara State experienced higher percentage increase (32.5%) aside 2019 was in 2012 when the state had 27.0% increase under the defunct KW-BIR.
Conclusively, it is evident that no magic happened with the founding of the KW-IRS. There is not a single evidence to suggest that any miracle happened. All things considered, KW-BIR could well have generated N17bn, if not more, in 2016.
God bless Kwara State.
Kehinde A. Adetola writes from Ilorin, and he can be reached on Twitter via: @Optimistic_Ade or through his mobile number, 08068218386.