Newly Edo state local government harmonized tax law has effectively boosts Internally Generated Revenue (IGR) of the state. The new Edo state local government harmonized tax law has removed all ambiguity which in return gives assurance to the tax payer through via having access to records of all transactions between the payee and the tax officials. Governor Obaseki and other concerned citizens have called on governments at various levels to look for other means of revenue generation for the sustainable economic development of Nigeria. IGR performance was abysmally poor before the introduction of reforms by Governor Obaseki. The dwindling revenue and increased cost of running government require all tiers of Nigeria government to look for alternative means of improving their revenue base. It is obvious that the country’s revenue from oil can no longer fully support its development objectives.
The harmonize revenue collection law has increased the IGR by the various local government areas in Edo state.

Governor Godwin Obaseki has expressed delight in the quick passage of the law thanking the State House of Assembly for their commitment to the reforms by his administration in 2017. Governor Obaseki said it was discovered that the levies and taxes collected especially in local government council was not uniformed as such the bill was introduced. “We thought before re-introducing collection of taxes in the local government councils, we needed to have the enabling law to back such collections. We needed to have harmony and uniformity in this taxes and levies.

Obaseki said his administration has put in place a technology which is not cash base which will make the system efficiency in the collections of this revenue. He said his administration will ensure that all taxes and revenue paid by Edo people are captured and deposited in the treasury of the Edo State Government. “This sum or amount will be judiciously used for the progress and development of the state”.

Governor of Edo State, Mr Godwin Obaseki, has said that Internally Generated Revenue (IGR) reforms being implemented by his administration have yielded positive result, as annual collection in local council areas has climbed from N30 million in November 2016 to 150 million in November this year. The governor said this when he inaugurated the Edo State Council of Traditional Rulers and Chiefs, at the Government House, in Benin City.

Obaseki said that the appreciable rise in revenue collection was as a result of various institutional reforms being implemented in the state, noting that the use of automated systems, such as Point of Sale (POS) machines, tax vouchers, among others, have revolutionised revenue collection in the local councils. He added that the increased revenue profile has made local councils buoyant and now able not only to meet their statutory obligations, but also contribute to development.

The governor said that the state took a methodological approach in attaining the feat with IGR, as it conducted pilot study in 9 locations in Oredo local council, to operationalise the concept, adding, “When we conducted the study, Oredo LGA used to remit N42,000 a day, but after we introduced electronic devices, that sum climbed to N500,000.” Assuring that even more revenue is expected in the coming months, he said, “We are opening up Edo State for business and companies are heading down here. It is expected that with increased business activity to be occasioned by our investment drive in the state, more companies will spring up and the revenue profile we see today, will rise even further.”

With crude oil mineral resources constituting more than 80 per cent of Nigeria’s revenue stream, the country’s liquidity condition has, expectedly, been jolted since the third quarter of 2013 when prices at the international market headed downwards until recently when it began a gradual recovery. The slide downwards has made it very difficult for the funding of the capital components of the 2014 fiscal plan as envisioned. Consequent upon this, the current fiscal plan still with the National Assembly presents a very tight and austere budget with some of ministries, departments and agencies (MDAs) getting zero allocations for capital expenditure, the scrapping of certain redundancies within the public service and introduction of alternative areas of revenue generation to make up for the more than 50 per cent drop in revenue from the petroleum sector.

The economic outlook of the last quarter of 2014 for Nigeria exposed the grave weakness of the economy. The falling oil prices since the middle of 2013 led to panic economic measures by both the Central Bank of Nigeria and the Ministry of Finance towards the end of the year. The drastic measures taken by the Federal Government and CBN were the devaluation of the naira and the increased reserve ratio as well as retention of high monetary policy rate. These measures were expected to curb credit expansion and reduction in imports but they were misplaced measures. Over the past year, the Nigerian naira has lost more than 20 percent of its value, due to a number of factors including the global oil price fall and corruption. As a result, Edo local government councils and local traders have seen importation costs soar, investors have fled the local scene in Nigeria, and capital market players have had their wealth shrunk, though some may argue that it is just paper value.

Edo Local council sector witnessed a shockwave, following federal government revenue decline caused by reduced oil revenue. This was coming at a time when an estimated $25billion (about N4.95 trillion) in foreign portfolio investments have been lost over the last few months, following dwindling revenue and rising political tension across the country, ahead of the March 28 and April 11, 2015 general elections. Barely eight months after the rebasing of Nigeria’s gross domestic product (GDP), which places the country as the largest economy in Africa and the 26th in the world, there were indications that all was not well with the nation’s economy. Edo councils were having liquidity problem, worsened by the oil sector crisis. The depletion of the nation’s foreign reserves and excess crude accountswas yet to settle.

To ensure transparency, Obaseki said he has instructed that a separate schedule be presented where each local government will announce the taxes collected in each month and how it will be applied. He said this is necessary for the citizens to see how transparent this administration is in collection and usage of the revenue collected from the people.

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Inwalomhe Donald, Researcher, Benin City, Nigeria. [email protected]