Falling oil revenue: Amosun, el-Rufai device new strategies on IGR

Whatapp News



LAGOS (Sundiata Post) – In response to the current decline in Federation Accounts allocation to the three tiers of government occasioned by continued drop in oil prices, state governors have devised new strategies in raising internally Generated Revenue (IGR).‎

Part of the strategy is to ensure that they widen their net to ensure that all taxable items are taxed and to ensure integrity is maintained at the state levels.

Nasir , governor of Kaduna State, and Ibikunle Amosun, governor of Ogun State, in an interview with journalists at the second day of Nigeria Summit organised by The Economist of London in Lagos on Tuesday gave some hint on their efforts to intensify revenue generation in their states.

El-Rufai disclosed that his administration got a new tax code passed which consolidates and codifies all the taxes in Kaduna State in one document.

Other measures his administration has taken to improve on tax collection include to centralise tax collection in the Kaduna internal revenue service, enlarge the sources of taxation and ensure that the levels of tax are low.

“We think that with the legislation, framework and institution in place, we see our dependence on Federal Government allocation fall from 65 percent to 20 percent which is where Lagos is and that is where we want to get to in a couple of years”.

Corroborating el-Rufai, Amosun said, “In the last FAAC meeting we were given N1.2 billion, my primary school teachers bill alone is about N2 billion. If I have a monthly bill of N9.7 billion and what I get is N1.2 billion, then you know there is a crisis.

“But we are working round the clock to increase our IGR. Before we were number 20 but today we are number 2. The only way to go is to increase our IGR such that we would care less about what comes from the federal purse, which is what presently Lagos does. At the last FAAC Lagos got about N4 billion, but if somebody gives you N4 billion and you can generate N20 billion then you are okay. Before we were generating N6 billion to N7 billion but because of this slow down, we are now struggling to generate between N3 billion and N4 billion.”

Speaking on naira devaluation at the event, El-Rufai, Amosun, and Umaru Tanko Al-Makura, governor of Nasarawa state, all disagree on the call for naira devaluation.

 “I am against devaluation now. I have not seen the benefit to the economy. We export nothing and import all. We have FX scarcity but devaluation is not the only solution. It has not worked. I have seen inflation imported but no benefit of devaluation to Nigeria. The only benefit is the removal of corruption in the system”, el-Rufai said.

He advised the Central Bank of Nigeria (CBN) to reduce interest rate to near zero level. “The biggest problem destroying the economy is the level of interest rate. With the level of interest rate, no one can borrow at 20 percent and have real business. We must make policy decisions that will take interest rate to near zero. The CBN should either bring down interest rate or one day we will do it for you”.

 

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