Internally generated revenue by the 36 states and the Federal Capital Territory (FCT) fell by 11.7% in the first six months of this year, Chairman, Nigeria Governors’ Forum (NGF), Kayode Fayemi has said.
Fayemi, the Governor of Ekiti State, spoke on Monday during his opening address at the 6th IGR National Peer Learning Event.
He noted that the year 2020 presented states with a perfect storm of difficulties to deal with, from a health pandemic to the second economic recession in five years.
He however, disclosed that despite the overall decline, some States recorded positive growth, including Ebonyi, Gombe and Yobe which recorded more than 50% in growth.
“The 2020 half-year year-on-year IGR performance reported a negative growth of 11.7 percent for the 36 States and the FCT. Despite the overall decline, some States recorded positive growth. “Three States in this category are Ebonyi, Gombe and Yobe which recorded more than 50% in growth. I trust these States have experiences to share that others can learn from.
“At the federal level, a new Finance Bill is being proposed to provide a legal framework that underpins many of the reform recommendations to stimulate the economy and deliver an effective but friendly tax system.
“The Forum is actively engaging with the Federal Ministry of Finance Budget and National Planning on the provisions of the Bill, especially those impacting State taxes and jurisdiction. It is important the Bill services the interest of all and not a few.”At the State level, we are professionalizing our Internal Revenue Services to be taxpayer-centric and responsive to the new normal of digitalizing tax administration. The world’s trade and financial market are going digital and we must adapt or be left behind. “We are not canvassing or proposing for new taxes to be introduced but emphasizing the need for our Internal Revenue Services to be more strategic, innovative and pragmatic in administering those taxes, fees, levies and charges that have been legally prescribed for collection across various jurisdictions” he said.
Also, Asishana Okauru, Director General of NGF, as the impact of the COVID-19 pandemic prolongs, governments at both the national and sub-national levels have suffered revenue shortfall and contraction in their tax base owing from the decline in business activities.
“Governments have been compelled to increase public spending to mitigate the impact of the pandemic, by setting-up testing and treatment centres from scratch and implementing targeted responses in public health, security, public works, social safety and other stimulus-targeted interventions, including tax relief for individual taxpayers and businesses.”At the onset of the pandemic, the NGF Secretariat provided two important advisories for states – on taxes and federation revenues – including a tax advisory for tax authorities; and a budget advisory for State ministries of finance and budget which estimated the revenue gap expected from the fall in oil prices and shutdown in businesses. Although very useful, nearly 10 months after, we have seen the emergence of a second wave globally; here, we are starting to record daily cases which are as high as what was recorded 6 months ago. This means that the current economic and social risks are not going away soon. Governments must prepare actively to confront them” he said.