Oyo IGR averages N2.3bn monthly, targeting N6.2bn ― Finance Commissioner
• We’re raising N100bn bond at cheaper rate than Ajimobi’s govt, he adds
The Internally Generated Revenue (IGR) of Oyo State now averages N2.3billion monthly.
While N1.250 billion was realised as IGR in April, N1.50 billion was amassed in May and N2.6billion accumulated in June.
State Commissioner for Finance, Mr Akinola Ojo, who made this disclosure, on Monday, said the state looked to hit a monthly IGR of N3.2 billion by end of this year and N6.2billion by May 2023.
He hinged the resolve of the current administration to achieve the set IGR targets on efforts aimed at expanding the state’s economic base, creating wealth for citizens, erecting the right infrastructure, harnessing the state’s potential, creating enabling environment to attract foreign investment.
“The goal is that before the end of this administration, our IGR should be in region of N6.2bilion. We want to be able to cover of salary wage bill with our IGR. COVID-19 slowed down the IGR hopefully by the end of the year, we should hit N3.2 billion,” Ojo said.
According to Ojo, the state executive council’s approval of N100 billion bond was also in line with plans to significantly boost the state’s economy and achieve an increase its IGR.
He explained that the N100 billion was a private bond such that the private sector backed by the state government participates in the risk of the bond.
He added that the bond the current administration looked to raise was in the region of between 12 and 14 percent interest rate, at about three and a half percent as fees with repayment tenure of between seven to 12 and a half years.
Ojo described the bond to be raised by the Makinde administration as cheaper than that of former Abiola Ajimobi led administration got at about 16 and a half percent interest rate with about five and a half percent as fees.
“This is a private bond, it is backed by a private organisation backed by the Oyo State government. The private sector is going to participate in the risk of the bond we are currently doing.
“The private institutions will keep us on track to ensure we can deliver on what we say we want to use the bonds on. It’s a joint responsibility between private sector and the state ensuring we deliver all the projects we are putting in the bond.
“Bond gives us flexibility in terms of repayment. For commercial loans that you take, if you are lucky, you will get a maximum of three to four years and get it at between 16 and 17 percent.
“With this bond, we are looking at a tenure of between seven to twelve and a half years. The specifics of the bond are not yet clear but we know what we want as a state.
“Let me point out that the previous administration also raised a bond at about 16 and a half percent and the fees charged for raising that bond was about five and a half percent.
“This bond will be significantly cheaper than what was raised before. We are looking at being in the region of about 250 to 450 basis points below what the bond of the previous administration was. The interest rate for this one will be between 12 and 14 percent.
“The previous administration raised the bond and did about five and a half percent; we are looking at a cap of about three and a half percent for this current bond as the fees.
“This bond will be a lot cheaper and we will be getting value for our money. If we look at a bond for 10 years period, it gives us a lot of room to be able to execute the projects we want to execute and the repayment is not too stressful on the state,” Ojo said.
Speaking later at a stakeholders’ conference organised by the Mr John Adeleke led Oyo State Board of Internal Revenue, Ojo also unveiled tax incentives for individual taxpayers and business in the state.
Among tax incentives announced include an extension of the deadline for filing of annual returns for individual tax-payers and that for employees by employees of labour to August 31.
Waivers or penalties and interest were also granted employers in the primary sector who file tax returns by August 31.
Furthermore, 50 percent reduction in penalties and interests was granted employers in the secondary sector who file tax returns by end of August.
Also announced was a 75 percent reduction in penalties and interests for service sector employers who file their tax returns by August 31.
The tax incentives also allows tax agents to remit the Pay As You Earn (PAYE) to the extent of the staff strength that are paid in each month that COVID-19 has affected them.
A grant of 25 percent reduction in undisputed bill/assessment served by means of harmonized billing system is also granted any business that intends to pay their bill by September 30.