The Lagos state government is planning to shore up its revenue base to meet various economic challenges. It has planned to address loopholes in tax administration. Also, the government is not ready to sacrifice tax payment for gestures shown by corporate organisations. Akinola Ajibade reports

Fashola, Lagos State Governor

Lagos state government has begun a frantic search for ways of improving its revenue in order to meet the growing socio-economic needs of its populace.
Currently, Lagos boasts of the highest internally generated revenue (IGR) in the country. In the first quarter of 2008, the state realized N31.4billion revenue while the figure is N10.4billion monthly.

Prior to this period, the internally generated revenue has been on the upward trend. The revenue was N30billion in (2003), N34.5billion in (2004), N48.1billion in (2005), N66.8billion in (2006), and N94.8billion in 2007.

Altogether, the state government has realized N302billion in less than six years. The huge revenue, be though at it may sound, amounts to nothing in the face of the growing socio-economic challenges facing the state. The ever growing population of the state, the decayed infrastructures and prolong insecurity, arguably caused by poverty speaks volume of this development. And the need to redress the situation by generating more funds made Lagos State Internal Revenue Service to organise conference professionals in the state recently.. The professionals were drawn from the Engineering, Aviation, legal, tourism, among others. The interactive forum provides opportunities for many to ask questions on tax administrations in the state, present their grievances as certain taxes and proffered ways of improving the methods of generating taxes in Lagos.

Topping the list of issues raised at the forum was the lack of preferential treatment when it comes to tax payment, tax evasion, the Pay As You Earn (PAYE) among others.

According to the popular stand-up comedian, Ali Baba, tax payment is not well structured and as a result, the rich and the poor are made to pay for the same services or products. He said the development makes it difficult for the government to fully explore the tax options for socio-economic growth.

His question, which to many participants was quite interesting made the state government trying to proffer solutions to. According to the special adviser on taxation and revenue to governor Fashola, Mr Ade Ipaye, the government is planning to have a comprehensive tax regime through which it would be able to audit the property of the high net worth individuals in the state. Ipaye said that through the audit, the true position of what the wealthy people submit as taxable products would be known. This is he said would make the government to compel them to pay and further increase the revenue.

The issue of double taxation is another problem the government is trying to solve to ensure that the revenue is improved. He said that many people claimed that they pay one tax on income abroad and therefore argue that the need to pay income tax does not arise.

He said that such a person can on liberal ground be allowed to go, having shown the government a satisfactory evidence of payment.

Still on the issue of income tax, the Lagos state governor, Babatunde Raji Fashola said that it is an area that the government cannot compromise.

While distinguishing between the corporate and income tax, Fashola said the state government does not have control over corporate tax and as such cannot compel corporate institutions to pay the tax to the state’s coffers.

He said that the state government cannot write off the Pay As You Earn otherwise known as income tax on the basis of the fact that a corporate institution has performed its Corporate Social Responsibility (CSR).

He cited the reconstruction of Ademola Adetokunbo way in Victoria Island as an example. He said the cost of the project was equally shared by the government and the management of Eko Hotel.

Also, the private/public partnership which resulted in the construction of a road by Zenith Bank in Victoria Island came in handy. He said that the only gesture the government can show to the private concerns that have executed such project is to give them advertising rights as it did to Zenith Bank.

He said that tax payment is an obligation of every stakeholder in the state and as such nobody should shy away from it.

He reminded the stakeholders the grave consequence of evading tax , saying that the Chairman, Samsung Incorporation has just been sacked for evading tax.

Rationalizing the need to pay tax, Fashola said that the issue of tax payment and development are twin fold. He drew a correlation between socio-economic growth and effective tax regime, adding that the two must compliment each other.

He said that it is impossible for the government to meet its obligations of providing schools, hospitals, and good roads and generate employment opportunities for the populace.

He said that the N473billion budget for Lagos is quite ambitious but not sufficient to meet the needs of the government. Similar to that is the monthly revenue of Lagos that has shot up from N2billion in 2003 to N10billion the first quarter of 2008, arguing that the revenue pale into insignificance considering the huge projects of the government.

With this, Fashola said that Lagos is the poorest state in the country. Implicitly, Lagos needs more money. Little wonder that the government is trying to ensure that all taxes and levies are paid as at when due.

The government, according to Ipaye, has sort out the issue of levies to be paid to the coffer of the local governments in the state.

He said that the government has come out with approved list of levies, stressing that

National Assembly does not have oversight functions on the issue of levies and as result can not prescribe levies for the states.

He reasoned that the list of levies that would be displayed at every local government offices would help check fraud. He argued that the issue of paying authorized levies would be reduced as various professional would know what to pay and where to pay them. Also, the issue of manipulations of evidence of payments of levies by many Nigerians would be addressed as there would be a record of who pays what.

He cited cases where people doctored receipts and through that pay the lowest levy as one area of depleting the fortune of the state. He advised professionals to present evidence of payment of taxes and levies to the state to prevent cheating.

These among others, he said, as efforts to regulate the manners of collection of levies are in the pipeline.

Besides, the government has put in place to ensure payment of consumption tax and what it describes as Hotel occupancy. Though the government is targeting N15billion monthly revenue soon. But how possible is the feat. Time would tell.

The Lagos state governor, Mr. Babatunde Raji Fashola was unequivocal about the enormous challenges facing the state, saying that Lagos is the poorest, in spite of the huge revenue at its disposal. Fashola argued that the N10billion monthly revenue is nothing when averaged with the 18 million population in the state on the issue of tax evasion, accusing many Nigerians of paying so much on their property abroad and yet find it difficult to pay taxes and levies in the country. He noted that Nigerians pay Value Added Tax (VAT) among other taxes abroad and as a result must pay the same at home to ensure that the government meets its obligations.

Source: The Nation