How Ogun can generate additional N19b IGR - Tax Inspectors - SALIENT TIMES ONLINE


Sunday, 21 March 2021

How Ogun can generate additional N19b IGR - Tax Inspectors

By Our Correspondent

Worried by the dwindling revenue from the Federal government to states, the Inspector of Taxes Forum in Ogun state, yesterday proposed ways the state government can generate additional N19billion tax from operators of the informal sector.

The forum, said the proposal would help the state boost its Internally Generated Revenue (IGR) in the face of economic downturn occasioned by the outbreak of the COVID-19 pandemic. 

The Chairman of the forum, Adeleke Asiwaju disclosed that, the forum is working on how the state can capture 1,500 operators from the informal sector into the tax net of the state.

Asiwaju, who spoke at his inauguration ceremony as the new chairman of the forum expressed worry that the Finance act 2020 would drastically reduce revenue generation of both the Federal and the state governments.

To overcome this, the forum chairman said, governments at all levels must look inward to improve their IGR by developing new innovations and bringing more tax payers into the revenue net.

According to him, the provision of finance act exempt people earning N30,000 and below from paying tax.

Asiwaju noted that, the operators of the informal sector and the super rich who form the bulk pay little or no tax, saying "efforts to bring them into the tax net is a right step in the right direction because it will greatly enhance the state IGR."

His words: "We have prepared a proposal on how Ogun state government can generate additional N19billion from operators in the informal sector within six years.

"So far, the bulk of revenue from person income tax comes from those in the formal sector: employees in the private and public sectors whereas, those in the informal, the self employed and the super rich which form the bulk of the population pay little or no tax.

"We are planning to cohort the operators from the informal sector and the super rich into the tax net. That proposal will run for six years and within that six years we are trying to capture 1,500 tax payers into the tax net and during those years, the state will be able to generate additional N19billion as revenue from direct tax assessment which is being paid by those in the informal sector.

"The Finance act 2020 will drastically reduce revenue, but we are putting our heads together on how to get out of the doldrum because, already COVID-19 pandemic has inflicted untold hardship on revenue capacity of the state.

"We are discussing on ways and means to overcome the challenges that will come up through the provision of the finance act 2020 because the act spelt out that those earning N30,000 and below should be exempted from tax".