Governors Brainstorm To Block Tax Leakages, Improve IGR Collection

September 20, 2022

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Governors Brainstorm To Block Tax Leakages, Improve IGR Collection

•Launch new database on public finance

•States’ internally generated revenue grew by 35% in 2021 to N1.67trn

•Insecurity: Northern govs back southern counterparts on state police

The 36 state governors yesterday commenced a brainstorming session on how to improve their internally generated revenue (IGR) and block tax leakages.

Also, it emerged yesterday that states’ internally generated finances grew by 35 per cent from N1.31 trillion in 2019, to N1.67 trillion in 2021.

The governors also announced a new finance database that would enable them share information on tax reforms in order to improve their internally generated finances.

Addressing governors at a workshop yesterday, at “the 8th IGR Peer Learning Event and Launch of the Nigeria Governors’ Forum (NGF) Public Finance Database,” the chairman of the NGF and Governor of Ekiti State, Dr. Kayode Fayemi said the essence of the workshop was to find ways to improve tax collection and subsequently improve states’ revenue.

This was just as the Southern Governors Forum yesterday said it received with great relief the news of the resolution of the 19 Northern State Governors and Northern Traditional Rulers Council calling for the immediate establishment of State Police to address the continued insecurity challenges in the country.

Continuing, Fayemi who spoke at the NGF workshop said: “We have seen total IGR of states grow from N1.31 trillion in 2019, to N1.67 trillion in 2021, and the share of IGR (as percentage of total recurrent revenue) grow from 31 per cent in 2019 to 35% in 2021. While this is good progress, we must not lose sight of the need to sustain and advance the momentum of reforms, considering the decline in FAAC receipts.”

He said the workshop brought back a nostalgic feeling, saying it reminded him of a collective decision they took as governors in 2019, to be deliberate with reforming the tax administrations to become more efficient and effective.

He said consensus reforms were focused on ending multiple taxation; professionalising and modernising revenue services as well as embracing a taxpayer-centric culture that leases taxpayers’ compliance and strengthen the existing social contract.

Fayemi said the pact birthed the State Action Plan for Revenue Generation (SAPRG), whose implementation progress the governors examined with the objective of highlighting what had worked and what they needed to do better to foster an enabling tax environment and administration that allows them to optimise their revenue potential as sub-nationals.

In view of this, the Chairman of the governors’ forum added: “Our pursuit to do things differently has benefitted from the relentless efforts of our state officials, technical assistance programmes within our secretariat and partners’ support.

“Your collaboration and support have ensured we stay the course of implementation, delivering far reaching reforms, which have yielded the results we see today.

“Our renewed effort must take into consideration the emerging dynamics surrounding private income in Nigeria today, including the devaluation effect of the rising inflation rate, structural transition in employment, business dealings and investments, driven by the evolution of technology.

“Beyond the laws and regulations we have passed, we must occasionally by policy respond to the fast-changing tax environment, if we must stay ahead of evasion and avoidance tactics, recognise the need to support our internal revenue services and continue to empower them with the necessary political support and financial resources required for them to execute their mandate effectively,” the Ekiti State governor explained.

On how to improve their revenue base, Fayemi said, “Broadly, we must seek out ways to expand the tax net and improve our taxpayers’ database. This will require ending the proliferation of taxpayers’ identification numbers and databases. It is pertinent we harmonise; leveraging a unique identification number as is global best practice.”

Accordingly, he said, “For us to achieve this, information sharing between jurisdictions must be seamless, not only between the tiers of government but also inter and intra-state. I would like to encourage the Joint Tax Board (JTB) in its pursuit for a plausible solution to this anomaly.”

On strengthening public acceptability of tax collection, he said, “we have improved the transparency not just around tax revenues, but the entire treasury. Today our budgets and audited financial statements are not just publicly available, but also in citizen-friendly versions.

“This will be supported by the NGF Public Finance Database which we will be launching today.

“A database that allows users to easily filter and analyse states’ fiscal data and information. We understand the need to build greater accountability, especially showing citizens the linkage between their taxes and service delivery.

“We are working with our revenue services and other MDAs to expand our tax-for-service initiatives in rewarding compliance while ensuring citizens know where we expend their taxes annually”, the chairman of the governors’ forum stressed.

Speaking further, the outgoing Ekiti State governor said, “I am optimistic about the tax reform journey and believe even within the time some of us have left, we can achieve a lot. As is often said, government is a continuum, so I trust those after us to continue in these reforms and many more, as may be necessary in guaranteeing the fiscal sustainability of our states.”

With this, he said, “I officially launch the Nigeria Governors’ Forum (NGF) Public Finance Database – Nigeria’s first reference database for State-level public finance data.

“This database reiterates our commitment to fiscal transparency and accountability as well as our resolve to strengthen governance in the country. We welcome your continuous support.”.

In his speech earlier, the Director General of the NGF, Asishana Okauru, said the global finance database was Nigeria’s first open-source database of the fiscal data of the 36 state governments.

He further said the portal would host comparable annual data on government spending, revenues and financing in all states and would feature hundreds of performance indicators that measure the quality of public spending and the intersection of public financial management and service delivery in the country.

Okuaru said the technical sessions of the event would focus on the three primary tax reforms seen as essential for all states – the implementation of state Consolidated Revenue Codes (CRCs), autonomy for tax authorities and tax-for-service programmes.

“These reforms, when properly integrated in the tax administration system, are capable of scaling up effective organisational management, the quality of taxpayer services, taxpayer compliance and tax revenues,” he stated.

Southern Govs Hail Northern Counterparts, Traditional Rules on Call for State Police

Meanwhile, the Southern Governors Forum (SGF) yesterday said it received with great relief the news of the resolution of the 19 Northern State Governors and Northern Traditional Rulers Council to call for the immediate establishment of state police to address the continued insecurity challenges in the country.

The Northern Governors Forum had on Monday, September 12, 2022, met with the Northern Traditional Rulers Council in Abuja, and came out with a resolution calling for the establishment of state police to tackle security challenges in the region and the nation at large.

The SGF reacting through a statement signed by its Chairman, and Governor of Ondo State, Mr. Oluwarotimi Akeredolu, explained that the decision of the northern governors to support the call for constitutional amendment to reflect the current realities could not have come at a better time than now when the confidence in the capacity of the federal government to secure the country appears shaky.

The statement read: “All patriots must salute the courage of the 19 Northern Governors and the Northern Traditional Rulers Council for their stance at this crucial moment in the country.

“We, on our part at the SGF have continued to reiterate the fact of the incongruity inherent in an arrangement which purports to be federal, nominally, but whose observances stand at variance with the best practices espoused by climes considered advanced and progressing, amenable to nuances and adaptations which reflect and accommodate the yearnings for inclusion of the component units.”

The governors stated that they would continue to insist on the creation of state police as the only logical and pragmatic solution to the pervasive problem of insecurity in the land.

“In addition to this, we shall not fail to renew the call for the adoption of policies geared towards real devolution of powers to the federating units indeed. This is the surest path to peace and progress,” the SGF added.