The Nigeria Governors’ Forum (NGF) says state governments intend to strengthen their tax systems in order to shore up internally generated revenue (IGR) amid dwindling monthly federal allocations.
Kayode Fayemi, chairman of the NGF and Ekiti State governor, speaking at the 8th IGR peer learning event and launch of the NGF Public Finance Database, in Abuja on Monday, said the governors must respond to the fast-changing tax environment to stay ahead of evasion and avoidance tactics.
“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.
Kayode, while recognising the need to improve internally generated revenue services through the JTB, said the government will empower them with the necessary political support and financial resources required to execute their mandate effectively.
“We remain committed to keeping this pact. However, mutual accountability must exist – to whom much is given, much is expected.
“Broadly, we must seek out ways to expand the tax net and improve our taxpayer database.
“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.
He called for consensus reforms focused on ending multiple taxation, professionalising and modernising revenue services, as well as embracing a taxpayer-centric culture that eases taxpayer compliance and strengthens the existing social contract.
The governors used the occasion to launch the State Action Plan for Revenue Generation (SAPRG), aimed at “underscoring what has worked and what we need to do better to foster an enabling tax environment and administration that allows us to optimise our revenue potential as sub-nationals
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“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.
“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 % of total recurrent revenue) will grow from 31 percent in 2019 to 35 percent 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 stated that the 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.
Fayemi called for the harmonisation and leveraging of a unique identification number as global best practice, which will require ending the proliferation of taxpayer identification numbers and databases.
“On strengthening public legitimacy for tax collection, 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 being launched today; a database that allows users to easily filter and analyse states’ fiscal data and information.”
He also stressed 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 spend their taxes annually.
Asishana Okauru, director-general, said the theme “state’ of tax reforms in Nigeria” stems from the work over the last eight years to strengthen domestic resource mobilisation through our IGR Dashboard and HelpDesk programmes that have supported the use of evidence in tax reforms, advocacy, and technical assistance provision to states.
“The country’s first open-source database of the fiscal data of the 36 state governments will also be launched today.
He disclosed that the “portal will host comparable annual data on government spending, revenues, and financing in all states, and will 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”
