An aggressive tax drive through tech-driven process will wean federating States from overdependence on federal allocations, Lagos State Governor, Mr. Babajide Sanwo-Olu, has said.
Lagos, Sanwo-Olu said, understood the challenges associated with overdependence on federal handouts early enough, prompting the State to pursue an inclusive revenue generation push to achieve financial autonomy and reduce its reliance on crude oil earnings.
The Governor spoke on Thursday when he officially flagged off the new National Taxpayers Identification Number (TIN) Registration System and Consolidated National Taxpayers Database in the Southwest region.
The new TIN was introduced by Joint Tax Board (JTB) – a body headed by the Executive Chairman of Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler.
Sanwo-Olu said the sustenance of Lagos’ tax collection drive in the last 20 years had helped to insulate the state from the effects of decline in revenue derived from Federal Account Allocation Committee (FAAC), arising from the 2014 crash of global crude oil prices.
He said: “With improved tax revenues, governments of the federating states can begin to wean themselves from an overdependence on crude oil earnings. In Lagos, we very much understood the importance of this early enough.
“The overwhelming success of our tax collection drive over the last 20 years has helped, in no small measure, to insulate Lagos from the worst effects of the decline in FAAC allocations resulting from the 2014 crash of global crude oil prices. Many other states in the federation were not as fortunate.”
To achieve improved revenue generation, the Governor said there was need to pursue efficient tax compliance among the citizens, pointing out that an improved tax collection and tax compliance drive would be a win-win policy for the government and the people.
He said: “We know that as the level of tax compliance rises, citizens are more inclined to hold their governments accountable and demand a higher quality of governance and service.
“Citizens everywhere in the world are constantly seeking easier ways of engaging with their governments and fulfilling their civic responsibilities. It is the duty of governments to respond to this need by removing barriers that inhibit compliance.”
How would the government achieve higher tax compliance? “It is through technology,” Sanwo-Olu declared, adding that a tech-driven process remained the vital tool that should be leveraged by the government to actualise the purpose.
He said: “This new Taxpayer Identification Number Registration System demonstrates the transformative power of technology as a significant contributor to the ease of doing business reforms, both at the national and sub-national levels. More critically, this also aligns with our agenda of leveraging technology to drive change across various economic sectors.
“I believe there is still a lot of room for improvement on the progress made but this laudable initiative we are flagging off today will go a long way in bridging tax deficit by capturing eligible tax payers within the tax net.”
The Governor praised the JTB and FIRS for the introduction of “a smart, innovative and technology-driven solution” in achieving higher tax compliance.
Sanwo-Olu urged the media to play its role in educating the public on the importance and benefits of the new tax collection approach.
Fowler, in his remark, said it was instructive Lagos was picked as suitable location for the flag-off of the new TIN Registration System in the Southwest, noting that first-ever tax transformation effort started in the state in 1999.
The FIRS boss said the Southwest was the largest contributor to the tax generated in 2018 among sub-national zones. This, he said, was as a result of vibrancy in economic activities in the zone.
He said the new TIN Registration System would not only improve the efficiency of tax administration system, but would also reduce the cost and challenges associated with tax collection process.
JTB Executive Secretary, Mr. Oseni Elamah, said the new registration system had addressed the challenges of multiple registrations previously experienced, adding that it had also strengthened transparency in collection process.
After unveiling the new TIN certificate, FIRS chairman presented Gov. Sanwo-Olu with his certificate.