A Seminar on Evaluation of Financial Abuse in the Public Sector (A Case Study of Federal Inland Revenue Service, Headquarters Abuja)
Chapter One
Objectives of the study
The main objective of writing this project “on the evaluation of financial abuse in the federal inland revenue service” is to bring to the notice of the readers the source from which government derived its revenue and how its expenditure controlled and also to identify the evaluation of financial abuse in the federal inland revenue service and some control measure which the government can adopt in order to present the financial abuse in federal inland revenue service.
The following are the specific objectives of the study:
- To examine the causes of financial abuse in the federal Inland Revenue service Abuja;
- To examine the effect of financial abuse.
- To suggest measures to reduce the financial abuse in the federal Inland Revenue service Abuja.
CHAPTER TWO
LITERATURE REVIEW
Overview of Federal Inland Revenue Service
The Nigerian Federal Inland Revenue Service was created in 1943. It was carried from the erst while Inland Revenue Department that covered what was then the Anglophone West Africa (including Ghana, Gambia, Sierialoen) during the colonial era. Tax provides revenue to fund government and ensures resource redistribution, streamlines consumption of certain goods and services, reduce inflation and generates employment (Varda, 2015).
The Federal Inland Revenue Services is constitutionally empowered to collect taxes. In 1958 the board of Inland Revenue was established under the income tax ordinance of 1958. The name was later changed in 1960 when the Federal Board of Inland Revenue (FBIR) was established under section 4 of the Companies and Income Tax Act (CITA) No 22 Of 1961 FBIR operated then as department in the federal ministry of finance a further transformation took place in 1993 when the finance (miscellaneous taxation provisions) Act No. 3 of 1993 established the Federal inland revenue service FIRS as the operational arm of FBIR, the Act also created the office of the executive chairman of the board. In 2007, the Federal Inland Revenue service establishment Act (2007) which granted autonomy to the service was enhanced. The federal Inland Revenue service decided to publish a list of operational offices, jurisdiction and telephone numbers.
This directory is a guide to all tax payers on how best they could access services; it is hoped that these directories will foster continuous interaction between FIRS and tax payers and guide the service on how best to serve the public. The boards consist of:
- The executive chairman of the service who shall be experienced in taxation as chairman of the service to be appointed by the president and subject to be confirmation of the senate.
- Six workers with relevant qualification and expertise who shall be appointed by the president to represent each of the six geo-political zones.
- A representative of the attorney general of the federation.
- The governor of the central bank Nigeria or his representative.
- A representative of minister of finance not below the rank at director.
Concept of corruption and financial abuse
According to section 2 of Independent Corrupt Practices and Other Related Offences Commission (I.C.P.C) Act (2000), Financial abuse/corruption simply connotes impropriety and encompasses all forms of reprehensible, indecorous and infamous conduct in the performance of some official and non – officials responsibilities. This means any act, which go out of any normal societal behavior.
According to Nye, (2017), Corruption is a behavior, which deviates from the formal duties of a public role, because of private (gains) – regarding (personal, close family, private clique, pecuniary or status gains). It is behavior, which violates rules against the exercise of certain types of duties for private gains – regarding influence.
Banfield (1961) says that Financial abuse/corruption includes such behavior as bribery (use of a reward to prevent the judgment of a person in a position of trust; nepotism (bestowal of patronage by reasons of astrictive relationship rather than merit); and misappropriation (illegal appropriation of public resources for private uses.
Corruption is the efforts to secure wealth or power through illegal means or private gain at the public expense; or a misuse of public power for private benefit. (Lipset and Lenz 2000).
According to Gboyega (2012), “Corruption and Democratization in Nigeria”, Corruption involves the giving or taking of a bribe, or illegal acquisition of wealth using the resources of a public office, including the exercise of discretion”.
Section 46 of the Economic and Financial Crimes Commission defines financial/economic crimes to means, “the non – violent criminal and illicit activity committed with the objective of earning wealth illegally either individually or in a group or organized manner thereby violating existing legislation governing economic activities of government and its administration and includes any form of fraud, narcotic drug trafficking, money laundering, embezzlement, bribery, looting and any form of corrupt practices, illegal arms deal, smuggling, human trafficking and child labour, illegal oil bunkering and illegal mining, tax evasion, foreign exchange malpractice including counterfeiting currency, theft of intellectual property and piracy, open market abuse, dumping of toxic and prohibited goods etc.
Okolie, (2006) described financial abuse/ corruption as the manifestation of a criminal act done either solely or in an organized manner with or without associates or groups with an intent to earn wealth through illegal means, carrying out of illicit activities which violate the laws of the land and other regulatory statutory provisions governing the economic activities of the government and administration.
Origin of corruption and financial abuse in Nigeria
The origin of corruption and financial abuse in Nigeria predates our political independence. The evidence of this fact derives from the allusion to the following statements. For instance, “on February 26, 1952, the Emir of Gwandu moved the following motion in the Northern House of Chiefs: “That this House, agreeing that bribery and corruption are widely prevalent in all walks of life recommends that Native Authorities should make every effort to trace and punish offenders with strict impartiality and to educate public opinion against bribery and corruption” (Adebayo. (2916).
Eleven years later, Ronald and Edgar (1963) were able to observe that “in Africa, corruption and financial misappropriation flourishes as luxuriantly as the bush and the weeds which it so much resembles, taking the goodness from the soil and suffocating the growth of the plants which have been carefully and expensively bred and tended. The forces ranged against it are negligence”.
From the above observations, it is clear that corruption now prevalent in Nigeria today has grown beyond imagination and to a degree, which boggles the mind. “Corruption” is a common word and has become part of everyday usage.
Types of financial crimes
Financial crimes are indeed a serious threat to the public sector and therefore a threat to the nation since the public sector is the heart of the nation. The existence and prosperity of a nation can be held to ransom by the activities of economic crimes perpetration. At this juncture, we will focus on the following types of financial abuses. Advance fee Fraud, fraud, money laundering and embezzlement of government funds; these are explained below.
Advance fee fraud
Advance fee fraud is a criminal offence defined and punishable under section 419 of the Nigeria criminal code. Statutory section 419 of the criminal code of Nigeria provides thus any person who by any false pretense and with the intent to defraud, obtain from any other person anything capable of being stolen is guilty of felony and is liable to 3 years imprisonment.
CHAPTER THREE
CONCLUSION AND RECOMMENDATIONS
Conclusion
This study evaluated the financial abuse in public sector, using Federal Inland Service Headquarters, Abuja as the case study. This study has been able to reveal that financial abuse and corruption are being perpetrated in the public sector at a high rate and that has been affecting our economic development negatively and also the measures by government and anti-graft agencies in curbing financial abuse, corruption and economic crimes reduce crimes in the public sector. Also, the checks and balances in the ministry result to effectiveness and utilization of public funds in the public sector. This means that the law enforcement agencies can only reduce the financial abuse and economic crimes but cannot totally eradicate it and this is as a result of law enforcement agencies ineffectiveness.
This enforcement agencies turned a blind eye to the deteriorating situation because whenever they were investigating any crime, there would always be a call from above telling them to drop the case, this has led to a situation where they are no longer interested in fighting crimes but only in collecting their own share from perpetrators.
In lieu of this, there is need for all government, religious bodies, schools, traditional rulers, friends and families as well as the public sector and workers to contribute efforts to fight a vigorous war against economic crimes in the society in general.
In conclusion, it is impossible to totally eradicate financial crime but it could be reduced to a minimum rate. Various control measures have been introduced in the public sector to do just that, only time will tell of their effectiveness or if amendments are needed.
The war on this hydra-headed monster called financial abuse and economic crimes should therefore continue unabated and the entire sundry should be actively involved to ensure its eradication.
Recommendation
Based on the findings, the following recommendations are offered to all the parties concerned as regards financial abuse, corruption and economic crimes in the public sector.
TO THE GOVERNMENT
- Government should remove immunity from office holders to enable law enforcement agencies to go after any perpetrator of financial abuse, corruption and economic crimes and none should be above the law
- Courts specifically for corruption and economic crime should be established and judges appointed. This would make for speedy trials for cases involving financial abuse, corruption and economic crime as a temporary measure.
- Government should fund and equip law enforcement agencies (in charge of corruption and economic crimes) so that they can carry out their duties effectively
- Government should create enough jobs for the teeming public thereby reducing unemployment, idleness in youths and increase job security.
TO THE FEDERAL INLAND REVENUE SERVICE
- Offices should be set up in all states of the federation to enable coverage of the FIRS in the whole country, thus removing all hideouts where perpetrators feel safe and comfortable.
- The public sector should organize seminars and workshops on financial abuse, corruption and economic crimes to sensitize worker of the ministry on the various ways crimes could be perpetrated so as to avoid occurrence of the crime.
- Effective methods of checks and balance should be put in place to curtail excess by the FIRS headquarters, Abuja.
- The FIRS, Abuja should work hand in hand with law enforcement agencies to catch offenders of financial abuse, corruption and economic crimes.
- The FIRS, Abuja should provide enabling environment and give free hand for internal and external auditors to do their job properly as this would discourage staff from perpetrating fraud.
REFERENCES
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- Amundsen, I. (2000), Corruption Definitions and concepts. The report was commissioned by the Norwegian Agency for development cooperation (NORAD).
- Banfield, E. (1958), The moral Basis of a back ward society, Chicago, free press.
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