Nigerian citizens across the board would have to start coughing out a plethora of taxes with state governments in the country determined to start funding their budgets with Internally Generated Revenue (IGR) beginning from the 2010 financial year.
At the opening of a 3-day National Round Table Strategy Session on IGR organised by the Nigeria Governors’ Forum in Abuja yesterday, the governors spoke on the need to rely less on money received from the Federation Account and to instead institute taxes on a variety of things. The main focus is to make IGR replace the Federation Account as the states’ main revenue source.
Chairman of the Nigeria Governors’ Forum Dr. Bukola Saraki said this is the right time for states to source for alternative revenue to fund their projects. He was represented by his Deputy, Chief Joel Afolabi Ogundeji.
Saraki, who is the governor of Kwara State, said, “Dependency on a mono source of revenue hardly develops the environment in a manner that taps the collective will of the people we govern. Apart from the need for sustainable sources of funding, we have to be ready to build a culture of hard work and enterprise such that people develop a sense of self worth and wealth creation that can be exported beyond the shores of Nigeria.”
He said even though international oil prices are on the rise, attention must be paid to alternative sources of revenue because oil prices could go down again.
He said, “If we follow global events on climate change and the effect fossil fuels have on the ozone layer, countries the world over are increasingly seeking alternative sources of clean fuel which would ultimately in years to come reduce the demand for oil.”
Edo State Governor Comrade Adams Oshiomhole in a paper titled “Rebuilding Tax Payers’ Confidence: the Confluence between Good Leadership and IGR” said state governments must have the courage to impose taxes and judiciously use the proceeds.
“If the peoples’ votes count, they will willingly pay their taxes because they trust their leaders. But if the leaders are not the true representatives of the people, they will resist whatever tax imposition. They will tell you that we didn’t put you there,” Oshiomhole said. He said only workers in the formal sector pay taxes while the rich billionaires and corporate organisations evade taxes.
The Edo governor also said companies should pay taxes on their turnover and not on their net profits because the net is subjected to several abuses. “It is the small people and workers in the formal sector that pay taxes because it is deducted at source. The big men who live in Asokoro and have all the big houses in Maitama do not pay taxes. They only pay taxes when they want to bid for a contract and they do so just because it is a precondition.”
Governor Babatunde Fashola of Lagos State said the state has in the past ten years grown its IGR from N600 million monthly to N14 billion monthly. This is more than twice what the state receives from the Federation Accounts monthly, he said. On his part, Cross River State Governor Liyel Imoke said his state’s IGR has increased from less than N500 million in 1999 to about N6.5 billion monthly today.