How states, LGs drive for IGR increases citizens’ hardship

With worsening economy exemplified by increasing unemployment, rising inflation and deteriorating conditions of living, Nigerians are still being hard pressed by desperate efforts of states and local governments to increase their incomes through internally generated revenue (IGR). 

By mid-2015, at least 27 of the 36 states were no longer able to pay salaries and allowances of staff. 

Many of them were owing up to 14 months salaries while others even began to pay 50 per cent of their obligations. 

This was largely because, even though Nigeria’s economy was much diversified, its sources of revenue remained dependent on crude oil proceeds. 

Again, most of the states and councils had come to rely solely on revenues accruing from the federation account with little or no efforts made at enhancing their internally generated revenue (IGR). Data from National Bureau of Statistics (NBS) showed that for the whole of 2015, total internally generated revenue for the 36 states dropped from N707.8 billion in 2014 to N683.6 billion in 2015. 

Ebonyi did not submit its details to NBS for the year. Concerted effort by the subnational governments has, however, pushed their efforts from that figure to N693.91 billion just for the first half of 2019, although the negative effects of the coronavirus pandemic pushed this down to N612.87 billion in the first half of 2020. 

Although this has enabled the states and local governments to be able to meet some of their obligations like payment of salaries, provision of infrastructure facilities and human development necessities for their citizens, it, however, increased the burden of citizens even in the face of worsening economic situation. In the Federal Capital Territory (FCT) small and medium enterprises (SMEs) have been lamenting the qualitative and quantitative taxes, fees and levies that they pay, which is strangulating their businesses. 

A business owner in the Wuse 2 area lamented that in his line of business, entrepreneurs are required to register with four different agencies. “Abuja Municipal Area Council (AMAC) charges us N100,000, Environmental Health Officers Registration Council (EHORECON) charges N60,000, Public Health Department charges N50,000 and the Abuja Environmental Protection Board (AEPB) charges N60,000,” the business owner said. 

These are aside tenement rates, vehicle signage and local government papers, among others. In the last one year, AMAC has also introduced forceful tax collectors known as AMAC Marshals who fight, beat citizens and destroy their vehicles at will. 

In Kano, tax payers also lament the burden of taxes with home owners complaining bitterly. Mr John Tochukwu, who spoke to our correspondent said “before, I paid N200,000 for a storey building but now, government has given me new ticket of N350,000 to pay per annum.” 

Alhaji Ayoola Ibrahim, speaking in the same vein, disclosed that formerly “was paying N350, 000 for my three-storey building as tax to government, but now it has been jacked-up to N500,000.” Tricycle owners recently went on strike in the state after the introduction of a new daily levy of N100. 

In Anambra, chairman of the State Internal Generated Revenue Service, Dr David Nzekwu, said government derives its IGR from traders, investors, tricycle operators and motor parks, who come to Onitsha and Nnewi to transact various businesses. He said the markets generate more funds to the state government, adding that, “to be honest with you, most of the money we use in paying workers’ salaries on monthly basis come from the markets revenues.” 

Citizens however, allege that there are other oppressive ways by which government collects taxes and levies, including payment of N700,000 for building approval and certificate of occupancy, which is forcing citizens to migrate to neighbouring states of Enugu, Ebonyi, Akwa Ibom and Cross River to build their houses and settle down with their families. A garri seller at Eke-Awka market, Mrs Agnes Okwu, who lamented the high rate of taxes in the market, said she could no longer eat three square meals with her children. 

According to her, “I usually bought bag of garri for between N12,000 and N13,000 and I would sell it at times for N14,000 and I paid tax of N700, the profit left would be N300. I am begging you people to help us tell Governor Willie Obiano to come to our aid to enable us to train our children. Officially, Cross River State has made so many tax exemption, but commercial and market women are still harassed daily by “hundred Marian boys” and “ticket boys.” A civil servant who begged to speak on condition of anonymity said, “revenue generation comes from timber and log as well as other sources such as state allocations and LGA allocations to local governments, that I know. 

“But the government is quiet on these sources, so citizens don’t question. That is wrong, and citizens are suffering, pensions are not being paid, magistrates are protesting, have you ever heard of that?” she queried. 

Kaduna State raised its N12 billion IGR in 2016 to N44.9 billion by 2020, catapulting it to number one in northern Nigeria, after Federal Capital Territory (FCT). Executive chairman of the Kaduna State Internal Revenue Service (KADRIS), Dr Zaid Abubakar, said the state makes money from Geographical Information Systems (KAGIS) as ground rent, quality assurance registration and renewal of schools and then the motor vehicle administration that was also activated and brought to life, including personal income tax, which include pay-as-you-earn (PAYE) and direct assessment.

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