Is Lagos getting equivalent of its 70% contribution to Nigeria’s tax revenue?
The recent revelation coming from the summit of the Society of Women in Taxation (SWIT) that 70 per cent of the N5.2 trillion taxes collected in 2018 came from Lagos State alone, has continued to raise questions on a number of issues.
Whereas some schools of thought say the development showed serious lopsidedness in tax base ratio to monthly federal allocations, others say the long four-year tax reforms and campaign by the current administration failed to make any impact in the remaining 35 states.
Development economists who weighed the scenario were of the opinion that tax revenue allocations across the states is in need of restructuring so as to create a system that can give to every state according to its contribution just as it currently stands in oil production and allied revenue.
Further findings revealed that majority of the tax revenue came from company tax and Value Added Tax (VAT).
According to the communiqué issued at the end of the SWIT Conference, participants called for a restructuring that will place sharing of tax revenues by the Federal Government on the same template with oil revenue which is derivation.
Business Hilights recalls Vice President Yemi Osinbajo had in May last year, revealed that “As at December 2017, only 943 Nigerians pay self-assessed taxes of over N10 million and of that number 941 live in Lagos State, the other two live in Ogun State.”
Osinbajo spoke at the 20th annual tax conference of the Chartered Institute of Taxation of Nigeria (CITN).
Besides, during the administration of former Governor Babatunde Fashola, he made strong case at the Council of State level on the reasons why the state should be accorded a Special Status not just as the former capital of the nation, but based on the quantum of tax revenues being generated by the Federal Government in the state, arguing that “Tax is the crude oil of Lagos State and therefore should be considered for special derivation allocation as done for oil states”.
