Osinbajo: Most States Can’t Survive without Federal Allocation

By Ndubuisi Francis in Abuja The Vice-President (VP), Prof. Yemi Osinbajo, has declared thatmost states of the federation cannot survive without the monthly allocation from the Federation Account. Speaking in Abuja Wednesday at the 20th annual tax conference of the Chartered Institute of Taxation of Nigeria (CITN), Osinbajo said prior to the discovery of oil, many regions in the country generated adequate revenue through taxes from agricultural produce to the extent that they still contributed money to run the government at the centre. He said: “Today, the states in the whole Western Region, apart from Lagos do not even earn enough in taxes to pay salaries let alone do any major project. “Without federal allocation, most states cannot survive. Lagos State alone takes as much IGR as 31 states combined. This tells you how little the other states generate in IGR.” Lamenting the low level of tax payment among Nigerians, he regretted that at six per cent, Nigeria has one of the lowest tax-to- GDP ratio in the world. According to him, as at May 2017, only 14 million of the country’s 70 million economically-active citizens paid taxes to the government. Osinbajo noted that through deliberate strategies to ensure voluntary tax compliance, the Federal Inland Revenue Service (FIRS) had been able to raise the population of taxpayers from 14 million in May last year to 19 million currently. Out of the total taxpayers in the country, the vice-president added that only 943 of them paid self assessment taxes of 10 million of naira and above, adding that of the 943 taxpayers who paid N10 million and above, 941 of them reside in Lagos while the remaining two are resident in Ogun State. Osinbajo make a statement that when people pay their taxes, they tend to hold government more accountable on how the country’s resources are being managed. He argued that the mismanagement of funds thrived in the past because oil revenue was readily available thereby reducing the need for people to pay taxes.