States And Internally Generated Revenue
Leadership Editorial
At the end of a three-day conference last week, state governors under the aegis of the Nigeria Governors’ Forum stressed the need to increase their states’ internally generated revenue (IGR). It was a wake-up call, albeit a belated one. The global economic meltdown, the fall of oil prices in the international market and the crisis in the Niger Delta that cut Nigeria’s oil production ought to have awakened the governors to the need to look inwards. The governors called for new tax laws and the strengthening of tax collection machinery.
Few states can be considered viable in the country. Of the 36 states, only Lagos, Kano and Sokoto generate tangible funds. A recent CBN report reveals that Abia recorded less than 10 per cent in the IGR ranking. The highest performer was Lagos with 63.5 per cent, followed by Sokoto with 46.6 per cent. Many others performed dismally. They all depend on the monthly handouts from the Federation Account. Therefore, agitators for new states lie when they sing about the “abundant human and natural resources” in their areas.
IGR could prove extremely useful to the states when they are collected. But the states fail to collect most of their taxes due to a combination of official corruption and the dubiousness of Nigerian politicians and businessmen.
At the governors’ conference, Edo State governor Adams Oshiomhole suggested heavy taxation of wealthy citizens. That suggestion is unassailable. Rich Nigerians hardly pay any tax. The governors should devise ways of tackling these tax evaders. Luckily, it is not difficult to spot a rich Nigerian. Often, the governors and other members of the executive shield them, partly because they funded their elections or are members of the same political party.
Needless to say, endemic corruption is a cog in the wheel of the states’ progress. Most of the IGR collected by civil servants end up in private pockets. Fake receipts are rampant. Perhaps, e-payment is the way to go. And public servants found to have diverted their state’s revenue should be punished. Where there is no accountability, nobody will be willing to pay taxes.
November 29, 2009
Tags: internal generated revenue, Nigeria Posted in: Leadership
Loading ...
Leave a Reply