Ogun State Governor, Senator Ibikunle Amosun, has canvassed a review
of the sharing formula of revenues accruing to the federation account
through non-oil taxes, including the Value Added Tax (VAT).
Amosun who spoke in Abeokuta insisted that recent development has made it inevitable for the review.
He
explained that the non-oil revenue sharing formula currently in use is
obsolete noting as at the time it was introduced 20 years ago, Ogun
State, was way back because of the number of industrial firms it had
then.
“Today, Ogun State is the industrial capital of Nigeria. The
sharing formula should therefore reflect this new reality. This is
derivation in another form”, he added.
The Governor spoke when he played host to the management of the Joint Tax Board (JTB) at his office, on Monday.
The
Board meets on quarterly basis to appraise the performance of the
members and to deliberate on tax issues of national importance to
develop new strategies and also carry out its functions, including
advising all tiers of government on tax matters, so as to evolve an
efficient tax administration system in the country.
Amosun, in his
keynote address at the meeting, stated that the present economic
recession is a blessing in disguise because “it has made it inevitable
for Nigeria to think outside the box”.
He challenged the
participants who are heads of Internal Revenue Services in their
respective States to bring in new ideas and “innovation” that would lead
to improved tax collection.
Worried by the present economic
situation whereby many States can’t pay salaries, Amosun said: “If any
State is not well, the whole Nigeria is not well”.
The Governor
stated, “It is a good thing that for the first time in the life of this
administration, non-oil receipts accounted for over 70 percent of the
funds shared at the last Federal Accounts Allocation Committee (FAAC).
It is a commendable and a welcome development because it signifies a
major shift in focus from oil to non-oil revenue.
“But in the same
token, I think it is very expedient to ask that we take a second look
at the formula we use in sharing the proceeds from these non-oil
revenue”, he quickly added.
Amosun argued, “If we make a lot of money from industries, we should
also remember that these companies reside in a state and they put
enormous pressure on the environment and the roads in those states.
Those various State governments carry the cans and pick the bills for
cleaning the environment.
“It is therefore only good for the
management of RMFAC (Mobilisation and Fiscal Allocation Commission) to
give more backing to those States hosting these companies.”
The
Governor also seized the opportunity to challenge the management of the
Joint Tax Board (JTB), which includes chairmen of 36 states Internal
Revenue Services, representatives of the Revenue Mobilisation and Fiscal
Allocation Commission (RMFAC), the Nigerian Customs Service and the
Immigration Service, to “device creative strategies” for ensuring that
more wealthy Nigerians are brought into the national tax bracket.
“The
rich and wealthy don’t pay taxes and even when they do, they underpay.
They make a lot of money but don’t pay anything or don’t pay the
requisite tax. We all go to other advanced nations and see that these
wealthy people don’t escape the way they do here. So the challenge for
the JTB is to correct this. You must think out of the box to achieve
this,” Amosun said.
The Chairman of the JTB, Babatunde Fowler in
his speech, disclosed that for the first time within the last six
months, non oil receipts accounted for 70percent of the N500billion
shared among the States at the last FAAC meeting “because of strategies
put in place to ensure that everyone pays their taxes as and when due.”
Fowler
stated, “We have put strategies in place to make sure that everyone
pays their taxes as at when due. Over the last six months or so we have
added close to 700,000 corporate accounts and among ourselves as members
of the joint tax board states which also includes States boards of
internal revenue we have put ourselves under heavy pressure to make sure
that bring more people into tax net.”
He lamented that 33 States
in the federation still depend on Federal Allocation to fund their
budget, saying the goal of the meeting was also to bring other States to
a level where they would be able to generate at least 50 percent of
their budget internally.
The JTB boss who regreted that only 10
percent of taxable adults are currently being taxed in Nigeria, revealed
that the JTB is now targeting 10 million new taxpayers before the end
2016.