Tax revenues have been identified as essential for State governments to maintain fiscal sustainability and boost their Internally Generated Revenue(IGR).
This was one of the submissions arrived at during a workshop organized by the States Fiscal Transparency, Accountability and Sustainability(SFTAS) programe under the federal ministry of finance, budget and national planning, in Abuja.
Speaking on a paper titled “New Approaches to IGR in the States”, the Senior Programme Manager, Nigerian Governors Forum/SFTAS, Mr. Lanre Ajogbasile explained that inefficient tax administration is one major challenge responsible for low tax revenues in states.
Ajogbasile who acknowledged that the adverse effect of the COVID-19 pandemic impacted government spending, added that the containment measures of the disease was responsible for lowered tax revenues and reduced IGR for state governments.
In addition, the worsening insecurity and currency deprecation that is affecting the business environment, productivity and income to be taxed was also highlighted by Mr. Lanre as working against the enhancement of state revenue mobilization.
Other challenges and issues pointed out by the NGF/SFTAS senior program director include Multiplicity of taxes, fees, levies and charges, Weak transparency and accountability by Government and state internal revenue service and Weak collaboration between State and Local Governments on joint collection of taxes.
Lanre however revealed various IGR reforms adopted by SFTAS between 2018 and 2022 to improve state revenue. These include: Publication cf annual budgets and audited financial statements to promote transparency and accountability, Passage of consolidated State Revenue Codes across 26 States to address multiplicity of taxes, implementation of a structured tax relief in response to COVID-19, among others
Consequently for state government to boost revenue in support of growth and debt sustainability and to further prevent fiscal crises as advised by Ajogbasile, the pace of reform would require Consolidation of identity management systems for tax purposes and the promotion of administrative efficiency through adoption of technology.
Earlier, the National Programme Coordinator, SFTAS, Mr. Stephen Okon, who spoke on behalf of the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the project is aimed to “help build trust in government, enhance the monitoring of fiscal risks and facilitate accountability in public resource management, thereby reducing the opportunities for corruption and misuse of public resources.
“It is also aimed at improving efficiency of spending and enhance state revenue mobilization to support growth and public service delivery as well as debt sustainability to prevent further fiscal crises which reduces the necessity of further federal bailouts” Okon said.
The States Fiscal Transparency, Accountability and Sustainability(SFTAS) programe is presently fully operational with organizational, technical assistance and verification structures across the 36 states of the Federation.
