Current tax framework hinders Lagos’ revenue potential, Sanwo-Olu tells FG

Babajide Sanwo-Olu, governor of Lagos, says the current tax framework significantly hinders the state’s revenue generation potential.

The governor spoke on Monday when he received Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, and his team at the state house in Marina, Lagos.

According to a statement by Gboyega Akosile, state chief press secretary, the team was in Lagos as part of the extended consultations with sub-national stakeholders to develop a viable tax administration framework for the country.

Speaking at the meeting, Sanwo-Olu said Lagos could widen its tax base and enhance efficiency in collection mechanisms, but efforts had been slowed down by bottlenecks caused by “fiscal and tax administration framework whose authority is exclusively vested in the federal government”.

He also said the state government is carrying a governance burden that is not commensurate with its revenue earnings.

“For us in Lagos, we know too well that we have the capacity to do a lot from the revenue generation standpoint; more importantly, from the effective generation and utilization of the tax,” the governor was quoted as saying.

“During our bilateral meetings in preparation to present next year’s budget, we pulled numbers up to N7 trillion based on our needs. But we are constricted by only the amount of revenue we can generate and pegged the value at N2.2 trillion.

“This speaks to the huge gap that we have in our capacity to develop the economy quicker and faster. We can no longer continue to complain. What are those things we can do to improve our revenue stream and our ability to be able to leapfrog and take governance in a more audacious way?

“This engagement with your committee is critical at this time, as you go round states to have feelings of what the bottlenecks are.”

Sanwo-Olu, therefore, charged the committee to come up with a quality intervention that would help the state attain their full potential in revenue generation and fiscal sustainability.

“We all need to work collaboratively on this objective. If all constraints are attended to, we should begin to see monumental changes in our revenue projection,” he said.

“As a state, we are ready to give you all the support required. We will open our books and share data to learn where we also need to make changes for higher revenue performance.”

‘REVENUE GENERATION SHOULD BE ACCOMPANIED BY QUALITY SPENDING’

On his part, Oyedele said the country needs to holistically look into its revenue problems.

“We are no longer at a point where we can continue to celebrate incremental progress in revenue generation; we need to accompany it with a transformational shift in the quality of spending of the generated revenue,” Oyedele said.

He said Nigeria’s spending on the ratio of gross domestic product (GDP) is the lowest in the world and this needs to be addressed without taking attention away from the quality of spending.