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Business News

FIRS records lopsided tax base as Lagos contributes 70% of Nigeria’s tax revenue

The Society of Women in Taxation (SWIT) has revealed that Lagos State contributed 70 percent of the N5.2 trillion taxes collected by the FIRS in 2018.

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Society of Women in Taxation, Federal Inland Revenue Service, SWIT, Nigeria's debt profile, Lagos Inland Revenue Service, Lagos State tax contribution

The Society of Women in Taxation (SWIT) has revealed that Lagos State contributed 70 percent of the N5.2 trillion taxes collected by the Federal Inland Revenue Service (FIRS) in 2018.

The tax group said the revelation is disheartening and worrisome. SWIT stated that the difference in taxation shows there is a lopsidedness in States’ contribution in Nigeria and this is not good for the country’s economy.

It was revealed during this year’s edition of  the SWIT Seminar, which forms part of the yearly tax conference of the Chartered Institute of Taxation of Nigeria (CITN), that the gap in tax collection across States shows that the long four-year tax reforms and campaign doesn’t have any impact in other States.

The Pioneer Chairperson of SWIT, Justina Okoro, was bothered by the contribution of other States which was estimated at 30 percent of the total tax collection by the tax regulators.

Solution to the unbalanced tax base

According to Okoro, there is a need to expand tax collections into the interior parts of Nigeria if the number of people in the tax pool is to increase and the nation’s tax base is to expand.

“For instance, out of the trillions of naira generated by the Federal Inland Revenue Service (FIRS), 70 per cent came from Lagos, which means that 35 states plus FCT contributed only 30 per cent.

“That also means that there are so many states with nearly no productive activities happening, and by implication are not paying tax. If Lagos decides to become a sovereign state, Nigeria will not be able to generate any revenue from tax.

“Government must take seriously tax revenue generation just like what is being done with crude oil. They should go into these places with natural resources and make it another revenue base.”

Okoro said the cities are the only ones living up to their tax commitment, while suburbs and local councils are lagging behind. She is of the opinion that Government is losing tax in states mining gold, diamond, and other natural resources.

There is a need for the FG and State Governments to partner: To ensure seamless and hitch free tax collection, Okoro said the Federal Government and the Governors in each state need to collaborate to weigh methods that can make these states viable and attractive to investors who will create more productive activities that would increase the tax base and revenue collection.

SWIT criticises FG’s increasing borrowing

Meanwhile, the Federal Government’s increased borrowings have not gone without notice by the SWIT members. The tax group’s incoming National Chairperson, Kudiirat Abdulhamid, wonder why the Government would ignore revenue generation opportunities and opt for credit facility.

Abdulhamid argued that debt increase will tie Nigeria’s resources to payment and servicing of loans. In her view, taxation is more profitable and bankable when they are used for developmental projects that will benefit Nigerians.

She said if the nation’s taxes are used judiciously, Nigerians will be eager to continue paying tax because the Government has provided basic amenities. However, when these infrastructures are not available, citizens won’t be encouraged to perform their tax obligation.

“I agree with people complaining over government borrowing, but if citizens pay taxes and it is judiciously utilised for provision of this services, people will be eager to pay more.

“But when government borrows money without providing infrastructures, citizens would become angry.”

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Energy

Agip shut oil facility in Bayelsa due to oil spillage, environmental pollution reported

Agip on Wednesday confirmed an oil leak, resulting in a shutdown.

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The Nigerian Agip Oil Company (NAOC) has confirmed the shutdown of its Idu oilfields at Egbebiri settlement within Biseni in Yenagoa Local Government Area in Bayelsa, due to an oil spillage.

A Joint Investigative Visit (JIV) report on the incident said that the leakage at the facility could be traced to equipment failure due to a rupture at the wellhead.

According to a report from the News Agency of Nigeria (NAN), Eni, the parent company of NAOC, in a response statement, said the facility was shut down to prevent further damage to the environment.

READ: Shell wants oil spillage case tried in Nigeria, but victims say no 

What Eni is saying

An Eni spokesperson on behalf of the Italian Energy firm, in a statement, said, “As soon as the incident was reported, we activated our oil spill response, shut in the well, and notified government regulatory agencies.

“The Joint Investigation Visit (JIV) was carried out on 09/05/2021, with the participation of community representatives and the government regulatory agencies.

“The event occurred within the Company’s wellhead location which is paved and walled round. There is no significant third-party impact,” Eni stated.

READ: UK court ruling affects acquisition of Shell’s oil block by Governor Wike 

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Environmental Rights Group reports environmental degradation

An environmental rights group, Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), however, said that the incident which discharged crude and associated gas had severely polluted the environment.

The Non-Governmental Organisation said that a visit to the spill site showed pictorial evidence of the crude spreading beyond NAOC’s right of way as nearby vegetation were affected as a result of the crude impact.

The Head of Field Operations at ERA/FoEN, Mr Alagoa Morris, in a field report on the spill said the Idu fields was notorious for frequent spills caused by equipment failure.

He said, “The people of Egbebiri in Biseni kingdom have experienced several oil spills over the years. And all the oil spill incidents documented by the Environmental Rights Action/ Friends of the Earth Nigeria (ERA/FoEN) in this community environment have occurred as a result of equipment failure and on Wellheads.

“ERA/FoEN has had cause to visit the environment of Idu Well 5 and 11 located within the same place in the past and it has always been Idu Well 11 spewing crude oil into the environment.

“Available records from ERA/FoEN indicate that there have been previous oil spills from this particular Idu Well 11 operated by Agip. Before concluding this Field Report, ERA/FoEN confirmed that Joint Investigation Visit (JIV) was carried out on Sunday, 9th May 2021.

“This is why the official Spill Reference No 2021/LAR/028/058 is indicated in this report; sourced from the JIV report. Cause of spill was attributed to equipment failure,” ERA/FoEN stated.

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The report quoted a resident of the community simply identified as Georgie as saying that the spill incident of May 7 spilled oil from around 10 p.m till about 8 a.m the next day before the leak was stopped adding that the level of damage was enormous.

What you should know

It can be recalled that in a similar circumstance, Shell Petroleum Development Company reported an oil pipeline spillage at its Okordia-Rumekpe 14-inch crude truck line, discharging about 213 barrels of crude oil into the Ikarama community in Bayelsa State and polluting about 1.34 hectares of land.

This new leakage is the latest in a series of oil spillages by the multinational oil exploration and production companies, which has put them in conflict with the host communities.

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Energy

Nigeria records system collapse during holidays

Nigeria’s national electricity grid collapsed on Wednesday morning.

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Abuja, Ikeja Discos top list in collection efficiency in Q1 2020- NERC, Estates in Lekki increase electricity tariff to N105/kWh, Eko Electric, Ikeja and 5 others to face NERC sanction for non-compliance, CBN reveals framework for financing National Mass Metering Programme (NMMP), Nigeria ranks eight African country with well-developed electricity regulatory frameworks, as Uganda tops.

The Nigerian grid has experienced a partial collapse, dealing a blow for stay at home Nigerians during the holidays.

This was confirmed in a statement by the Eko Electricity Distribution Company (EKEDC), as seen by Nairametrics.

What EKEDC is saying about the grid collapse:

“Dear customer, there is a partial system collapse on the National Grid. Our TCN partners are working to restore supply immediately. Please bear with us.”

According to latest reports, partial restoration of power is already occurring across the country.

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