Governor Babajide Sanwo-Olu of Lagos State sees the need to curb tax evasion and improve data gathering, “while also making it progressively easier for our people to pay their taxes”.
“All our actions in this regard must be driven by the current and emerging reality which clearly points to the unsustainability of crude oil sales as the primary source of government revenue,” Sanwo-Olu said in his opening remarks at the ongoing 22nd Annual Tax Conference of the Chartered Institute of Taxation of Nigerian (CITN).
The conference is themed “Taxation and Economic Competitiveness: Imperatives For National Development”.
“The theme of this conference is no doubt very relevant and apt. It will open a conversation on the need to strike a balance between the pursuits of a tax system for improved revenue on the one hand, and Nigeria’s push for global economic competitiveness on the other hand,” Sanwo-Olu said.
“Taxation is at the heart of the social contract between governments and the governed, around the world. It remains a major source of revenue for governments all over the world, in addition to being a major fiscal policy tool. In Nigeria, however, we have not optimally explored the instrument of taxation to maximize our revenue generation potential. One major challenge before us today is, how do we improve significantly on tax to GDP ratio, which currently remains one of the lowest in the world,” he added.
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He further stated,” As you are all aware, Lagos State is the commercial hub and financial centre of Nigeria. We are the 5th largest economy in
3 Africa, and the only Nigerian State where as much as 75 percent of annual revenues are generated internally, that is, from taxes, as opposed to Federal allocations. In other words, we are the Nigerian State that is least dependent on the monthly Federal Allocation. In 2019, Lagos contributed 65percent of the Value Added Tax (VAT) of Nigeria.
“We generated N644billion in internal revenue in 2019, with over 58percent of this being taxes and levies. And yet Lagos is the smallest State in Nigeria occupying just 0.4percent of Nigeria’s total land mass and is home to more than 10percent of the population; the most densely populated State in the country, and with the fastest-growing population as well. This is clearly a reflection of what can be achieved in spite of the natural limitations of geography.”
“But it also explains the serious challenges Lagos faces, and which it shares with other megacities all over the world: urban transportation, security, infrastructure, waste management, housing, education and healthcare, and so on. We not only have to cater to today’s population, we also have to ensure we are preparing for the future of one of the fastest-growing populations in the world”, according to Lagos State Governor.
He further stated: “Fortunately for us, we have a very young and vibrant population, with enormous amounts of productive potential. With the right enabling environment for them, we can unleash an unprecedented wave of economic growth and prosperity for Lagos State and for Nigeria. This is why as a Government we are committed to youth empowerment in all its ramifications, through various initiatives like the Lagos State Employment Trust Fund, and many others.
“We know that increased economic productivity translates into increased government revenues. Increased revenues then allow the government to invest even more in infrastructure and an enabling right, which will further engender private investment, ultimately becoming a virtuous cycle of prosperity for all concerned. Distinguished guests, ladies and gentlemen, the reforms we have seen in internal revenue generation over the years did not happen overnight, it took painstaking effort over the years, underlined by technology and the application of the needed political will.”
Tax administration reforms in Lagos State over the years have included the following: electronic filing of tax returns; fiscalisation of consumption tax, Electronic collection, automation of stamp duty processes, contact centre creation, Informal sector reforms through IBILE Hub, creation of virtual tax audit reconciliation, the release of public notices to clear grey areas and create a level playing field for all participants, policies promoting ease of tax compliance and cost of compliance for taxpayers.
“We acknowledge that we can do even better, and build on existing accomplishments. Let me use this opportunity to highlight the efforts of my predecessors in government, the vision and commitment they demonstrated to tax reform has helped pave the way for the successes we are seeing. And we acknowledge that we can do even better, and continue to maintain our pacesetting position in tax administration in Nigeria”, Sanwo-Olu added.
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