Economic recession: States now look inward, as Oyo targets N6.1bn IGR

Following the economic downturn coupled with dwindling federal allocations, some states are now looking inward to shore up their revenue base so as to meet up with their financial obligations.
The monthly allocations trickling down from the Federal Government to the states and local governments have drastically reduced as a result of falling oil prices.
The over-dependence on allocations alone from Abuja without additional revenue led to about 27 out of the 36 states not being able to pay salaries as and when due to their workforce, thereby pitching the affected state governments against the labour unions.
A good number of the states are owing salaries between three and nine months. This development and the present economic recession the country is going through may have led some states to put on their ”thinking caps” to devise strategies in order to increase their financial base through aggressive pursuance of various levies and taxes to increase their internally generated revenues (IGR) as well as utilise the abundant natural resources in their domain.
Oyo, which pride itself as a Pacesetter State is no exception as it has embarked on aggressive revenue generation drive.
Firstly, the state government started enumeration of all properties in the 33 local government areas of the state to help the government have a comprehensive Property Data Base of all commercial, educational, health institutions, industrial and residential properties.
Governor Abiola Ajimobi commenced this move with a call on its commissioners and political appointees to begin to pay their property tax.
The Commissioner for Lands Housing and Urban Development, Ajiboye Omodewu said the government officials in the 33 local government areas would soon commence the identification and enumeration of all properties under the supervision of Ministry of Lands, Housing and Urban development.
The statement further urged members of the public to cooperate with these officials, saying that the action would be beneficial to all and sundry.
The government also commenced re-energised enforcement of tax laws in the state with inauguration of inter-ministerial committee on the IGR drive.
The committee is expected to visit small, medium and large scale enterprises as well as the informal sector to demand evidence of tax payment in the last three years.
According to Ajimobi, “What we are doing is backed by law. We are not introducing a new thing; we are only trying to enforce payment of tax through our Board of Internal Revenue (BIR). We have met with associations and market leaders intimating them of government’s improved tax drive and they showed readiness to cooperate with us during the engagement. Some citizens are law-abiding and they pay their taxes, levies and duties when due but some have decided not to. It is the civic responsibility of every citizen to pay tax.”
“Over the years, we have not been fully enforcing the tax laws in the state. Most states of the federation were comfortable with the revenue from the Federal Government but now that the economy is dwindling, we have to look inward and increase our Internally Generated Revenue (IGR). I assure you that we are not going to create unnecessary hardship for the people,” he added.
According to the governor, the increase in revenue generation would lead to increase in developmental projects in the state; salaries and allowances of government workers would also be adequately taken care of.
Allaying the fears of the residents, the state governor assured that the tax drive would not create hardship for the people, explaining that the government was only blocking the loopholes affecting the state’s economy.
Ajimobi, who spoke through the Commissioner for Information, Culture and Tourism, Toye Arulogun, stressed that the government was simply enforcing already existing tax laws in the state, and not introducing new ones.
He appealed to industries and establishments in the state to cooperate with government officials who would be going round to carry out the assignment, adding that government’s plan to make life meaningful for residents, through the judicious use of tax collected from them would be achieved.
Ajimobi also expressed government’s empathy with corporate bodies, associations, market men and women and individuals on the high cost of living in the country.
He said that the administration is targeting about N6.1billion IGR by the year 2019 to get out of the present financial mess.
At a meeting with the state revenue agencies on the way forward from the current economic malaise, he noted that state government is currently generating an IGR of N1.2 billion and that government hopes to increase it to N2.2 billion by 2016.
Also, by 2017, the administration is targeting N3.6 billion IGR, which represents 50 percent increase and by 2019, we must have a revenue generating ability of N6.1 billion.
To put the state on a sound financial footing, Oyo State Government must be generating an IGR of N7.6 billion, he said.
Ajimobi said that there were two options in the restructuring effort of the administration to either increase revenue or reduce cost.
“In reducing cost, one would have to retrench the workforce, but since we are not downsizing, the only option is to increase revenue base of the state,” he said.
The governor said that in realising this objective, the state internal revenue board would be reconstituted for effectiveness and efficiency.
Ajimobi, while picking holes in the state’s current revenue drive, alleged fraudulent practices by agents collecting revenues for government.
He promised to also restructure the ministry, departments and agencies involved in revenue drive.
The governor said if the government must meet the amount needed for salary payment alone, all hands must be on deck to lift the state finances for the better, having gotten an approval from the state House of Assembly to improve the its revenue profile.
Apart from the revenue drive, the government is poised to harness the natural resources in the state for optimal advantage. Recently, the state put machinery in place to establish and package Shea Butter across the state for global transaction.
At a sensitisation meeting on Shea Butter production in Saki West, Saki East an Atisbo Local Governments, Ajimobi said it was imperative to turn available natural resources into wealth by improving on production, processing and packaging of agricultural produce for reliable marketing in order for the state to compete favourably in both local and international markets.
Likewise, as an agrarian state, the government has partnered with an Australian Agro-Processing Company by acquiring 50 hectares of land in Oke Ogun area. The new entrant had swelled the list of Australian companies that had entered into partnership Agreements with the state government in Mining, Agriculture, Education and vocational training.
To fast-track the implementation agreement and memorandum of understanding, Governor Ajimobi said his administration had put in place necessary machinery and the enabling environment for the businesses to thrive.
Oyo, he told the Australian High Commissioner to Nigeria, Paul Lehman, is a potentially a state of logistics, with a savannah temperate region and with the highest concentration of research institutes for sustainable agricultural development.
It is also a potentially developed state for mining, with the availability of marbles, calamine and identified areas of gold, adding that the partnership would enhance the socio-economic development of the state and the living standard of the people.

Akinremi Feyisipo