Nigeria's leading finance and market intelligence news report.

Ogun records 114% revenue growth to sustain top five position on States IGR Report

0
Political issues that characterised 2015 general elections which featured the free flow of foreign exchange to execute polls as well as culpable money laundering act of the past government which was said to have aggravated sudden fall in crude oil price internationally accounted for the country’s recession that sparked off the dwindled federal allocations to all tiers of government since 2015.
This, among other economic factors, prompted some States of the Federation to consider areas of comparative advantage and embark on intensive economic drive, fiscal restructuring and financial re-engineering with a view to providing buffers that tackle the nation’s recession naturally and automatically.
Ogun State is one of these States that had envisaged what the future would hold during and after recession, hence, Governor Ibikunle Amosun and his team swung into action to find reliable alternatives to financing N9.1billion monthly wage bill obligations, despite constant monthly collections of between N3 billion and N3.3 billion from Federation Allocation Accounts Committee (FAAC).
Part of what Governor Amosun did to increase internally generated revenue accruable to Ogun state coffers monthly from paltry N750 million revenue, about nine years ago, to about N7 billion on a monthly basis, was a huge investment in infrastructure which made easy access to land and land title documents as well as ease of doing business realistic thereby, attracting both local and foreign direct investments that translated into wealth creation and job opportunities.
The economic feats are also traceable to effective financial engineering methods that brought the much needed prudence and intensive revenue drive mechanism to administration of Governor Amosun in Ogun state with the effective blockage of the perceived revenue leakages and shoring up of internally generated revenue in the State.
Although, Board of Internal Revenue Service generates 60 to 65% of the entire monthly revenue through taxation and other levies, it must be noted that other Ministries, Departments and Agencies (MDAs) such as Ministry of Urban and Physical Planning that handles building approvals; Bureau of Lands and Survey which sells and allocates State lands, including issuance of land title documents as well as certificate of occupancy; Ministry of Commerce and Industry that gives haulage right of way, among other MDAs, also contribute to the monthly revenue generated for the State Government.
Introduction of single treasury account in Ogun state even before that of the Federal Government in all MDAs coupled with  automation and digital platform through which revenue is being generated; series of friendly approaches and engagement of tax payers through street to street, shop to shop and media outreach, inter-agency collaboration and enforcement as being undertaken occasionally by the Board of Internal Revenue Service, have all had positive impacts on the whole process of revenue generation.
For instance, Year-on-Year (YoY) revenue reports by National Bureau of Statistics (NBS) and Joint Tax Board (JTB) tagged, ‘States IGR Reports’ as well as the fiscal sustainability index researched by some financial information service platforms such as BidgIT, Proshare, Nairametrics, among others, have shown Ogun State in the league of top five Nigerian States in terms of Revenue Generation.
Available statistics between 2015 and 2018 put Ogun state only behind Lagos and Rivers states in terms of internally generated revenue as Ogun state made between N2.8 billion and N6.2 billion as IGR as against static N3.3 billion revenue coming to State’s coffers monthly, from Federal Allocation Accounts Committee (FAAC).
A four-year financial sustainability index analysis indicates that Ogun state has grown revenue by 144% between 2015 – N34.6 billion; and 2018 – N84.55 billion, meanwhile Lagos and Rivers states only grew their revenues within the period under review by 42.5% and 37.4% respectively.
A close analysis will further show Lagos and Rivers states that are above Ogun state on the revenue log as released by the National Bureau of Statistics (NBS) to have generated more revenues than Ogun state in terms of figures, but the percentage growth of revenue recorded by Ogun is far above Lagos and Rivers states.
Reports indicate that Lagos state made N268.2 billion in 2015 and 382.2 billion in 2018, representing a 42.5% revenue growth rate and Rivers state that raked in N82.1 billion in 2015 and N112.8 billion in 2018, representing 37.4% growth rate unlike Ogun state that increased revenue growth rate by a whopping 144% from N34.6 billion in 2015 when Mr Adeosun was appointed as OGIRS Chairman, to N84.55 billion in 2018 financial year.
Little wonder, the Governors’ Forum in 2017, invited the Chairman of Ogun State Internal Revenue Service (OGIRS), Mr Adekunle Adeosun, as one of the best performing states in terms of internally generated revenue in the country, to make presentations and by way of peer review, the economic mechanisms adopted to increase the revenue base of Ogun state more than ten folds.
Mr Adekunle Adeosun, a New York trained banker of over 30-year experience and Executive Director of a major commercial bank in Nigeria before being tapped by Governor Amosun to chair the State-owned Internal Revenue Service (OGIRS) in 2015.
The appointment of Mr Adeosun by Governor Ibikunle Amosun was meant to change the revenue narratives and fashion out ways by which tax net would be expanded to cover more tax payers with a view to increasing taxation-based revenue portfolio, a task that he jealously achieved by capturing 250,000 fresh tax payers from the informal sector and increasing the number of the High Networth Individuals (HNIs) in the State from only two persons to 126 persons, representing over 1,000%. All of these and more were achieved through a team work and implementation of tax laws backed up with enforcements.
Why the successes were recorded?
*Informal Sector and Personal Income Tax
This is the major tax area where lots of revenue were being lost on a daily basis before the advent of this administration. Hundreds of thousands of people who are mainly market men and women; taxi, bus and truck drivers; tricycle and Okada  riders as well as lots of operators of the small and medium-scale enterprises    were not captured and therefore, huge revenue was being lost.
But, the advent of Governor Amosun-led administration has brought paradigm shift in the whole process as a huge number of tax payers within the informal sector has been dragged into the tax net and more are still coming on board.
OGIRS was able to achieve 300% tax collection increment from this area due to intensive tax drive as being initiated by the State Revenue Board with the OGIRS Chairman himself, Mr Adekunle Adeosun and other very senior staff, leading street campaign for tax collection to markets, motor parks, public gatherings among other places across the three senatorial districts of the state.
This effort has not only increased level of tax payment compliance, but has also sparked off upward movement of trade associations captured in the tax net by 35%, the success which has turned Ogun State to a pace setter in the comity of Boards of Internal Revenue Service across the country as many of State-owned Boards of Internal Revenue Service now liaise with Ogun State Internal Revenue Service (OGIRS) to understudy the magic used to get more people from the Informal Sector into the tax net.

 

RAZAQ AYINLA  

Leave A Reply

Your email address will not be published.