Kaduna, Akwa Ibom boost PAYE by 50% in 2016

Kaduna and Akwa Ibom states in 2016 fiscal year boosted their PAYE revenue by 57 percent and 50 percent, respectively, and thus emerged as the states with the highest growth in PAYE for the period.
This is against the 10 percent nationwide increase in PAYE by 20 states that the National Bureau of Statistics (NBS) made available, the components of their internally generated revenue (IGR) particularly for 2015 and 2016, respectively.
A typical state’s IGR has several components, which include “Pay as You Earn” (PAYE), direct assessment tax, road taxes, other taxes, as well as revenue from ministries, departments and agencies otherwise known as MDA revenue.
Kaduna’s PAYE, which stood at N7.14 billion in 2015, rose to N11.25 billion in 2016. Similarly, Akwa Ibom’s PAYE increased to N17.39 billion in 2016, up from N11.59 billion in 2015. Other states with above national average growth in PAYE are Imo, Kwara, Zamfara, Taraba and Edo.
These are part of the findings made by BusinessDay Research and Intelligence Unit (BRIU), which served as one of the parameters used by the Award Committee to evaluate the short-term success in reforms across states of the federation and to shortlist those that met all the criteria for the forthcoming States Competitiveness and Good Governance Awards.
While explaining the factors responsible for the surge in PAYE revenue, Nasir el- Rufai, executive governor of Kaduna State, in an interview recently granted to BusinessDay, attributed the improvements to efficient reforms put in place by his administration.
“So we nearly doubled our IGR within one year because of the reforms we put in place and the establishment of the new Kaduna Internally Revenue Service. So our IGR is increasing significantly as a cushion for falling oil prices and falling inflows from the Federation Account,” El Rufai said.
According to El Rufai, not only are the reforms working, the increasing IGR has attracted positive rating from Fitch, the global rating agency.
“We went further to summit ourselves to Fitch to be rated and I am happy to say that our first rating last year was B with a stable outlook, and this year we maintained the same B with stable outlook where other states and even the federal government was downgraded, Kaduna was not downgraded as we maintained our ratings because a look at our balance sheet by Fitch clearly showed that our revenues are increasing, the cost of our operations was being reduced significantly, we are being more efficient in the deployment of every naira, so we maintained our outlook,” he said.
Furthermore, Imo’s PAYE increased by 37.3 percent; Kwara, 30.4 percent; Zamfara, 14.8 percent; Taraba, 14.6 percent while Edo raised it PAYE by 13.8 percent.
Similarly, Akwa Ibom recorded the highest growth in Direct Assessment Tax amongst the 20 states analysed. A direct assessment tax applies to self-employed enterprises. Thus, for Akwa Ibom state, this tax rose by 459 percent from N122.05 million in 2015 to N682.40 million in 2016. Osun’s growth was 345 percent, which put the 2016 direct tax at N790.90 million from N177.61 million in 2015. Benue, 179 percent; Zamfara, 178 percent and Kwara, 120 percent complete the list of states with three digits growth in direct assessment tax.
This tax increased by 5.4 percent nationwide, a development that made tax reforms in the aforementioned states among the most efficient across the nation in 2016.

 

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