The Lagos State Government is routing to stimulate economic growth through the pursuit of massive tax initiatives aimed at cushioning the effects of declining allocations from the Federal Government.
Taking a cue from global trends, the state aims to further reform its tax system, in recognition that an over 50 percent decline in oil revenue constitutes a major clog to government’s ability to finance developmental projects.
Lagos is further activating the provision of a 1 percent incentive for self-assessment, in accordance with section 45 of Personal Income Tax Act (PITA) 2004 as amended, noting that this new move is a statutory obligation which Nigeria’s largest city has promised to uphold.
Olufolarin Ogunsanwo, executive chairman, Lagos State Internal Revenue Service (LIRS) on Tuesday disclosed some of the initiatives that the state has recently put in place and those to come.
Analysts have identified sloppy taxation systems as one of the major drawbacks responsible for Nigeria’s poor ranking at 169 out of 189 in the recently released World Bank Ease of Doing Business Index (EDBI).
Lagos, as the economic hub of Nigeria, believes that for any reform to meaningfully impact on Nigeria’s rating, Lagos state must be at the forefront of such reforms. It is for this and other reasons that LIRS has consistently been at the vanguard of reform activities aimed at easing the process of doing business.
The initiatives include: revision of Tax Form A from six to two pages; e-submission of annual returns to ease compliance by tax payers; setting up of customer care desks; introduction of new payment platforms; processing of electronic Tax Clearance Certificates (eTCC) to ensure a maximum response time of 72 hours to all eTCC requisitions; and relaxation of the requirements for replacement of lost e-TCCs.
Also, Lagos State has commenced the process of overhauling its informal sector operations with a view to easing voluntary compliance by taxpayers in this huge sector, at minimal cost to all stakeholders. In view of the declining revenue from the central government as a result of fall in the price of crude oil, LIRS is poised to tap into other revenue sources such as consumption tax from hotel occupancy, withholding tax on contracts, rent, royalties and other areas, to shore up revenue.
Ogunsanwo said LIRS is also collaborating with the Federal Inland Revenue Service (FIRS) and other Ministries Departments and Agencies (MDAs) as well as strengthening its enforcement procedures to check tax evaders.
He further observed that Lagos State Internal Revenue Service has identified three categories of taxpayers in the informal sector –market men/women and artisans; micro, small & medium scale enterprises (including professionals) and Household Domestic Staff (HDS).
“In building our database to access information on taxable individuals’ resident in the state, we have been collaborating with Federal Government agencies such as FIRS, NAFDAC, Corporate Affairs Commission, Nigeria Immigration Services, Standard Organisation of Nigeria (SON), and the Copyright Society of Nigeria.
“At the State level we collaborate with the Motor Vehicle Administration Agency (MVAA), Lands Bureau, Lagos State Residents Registration Agency (LASRRA), Lagos State Lottery Board and Lagos State Video Censor Board.
“Following the mutual operational agreement between LIRS and FIRS, we have embarked on exchange of information, joint enlightenment and enumeration campaign and joint tax audit and investigation exercise, which is to be carried out in the coming months,” said Ogunsanwo.
“Since this current administration is about civic engagement and inclusion, it is expected that everyone in this sector will voluntarily comply with the tax laws by filing their returns in the presented form and be given an assessment accordingly.
“We would like to implore our market men and women, as well as the artisans to continue to cooperate with the administration of Governor, Akinwunmi Ambode by performing their civic obligations of paying their taxes as and when due, to move the State forward”, Ogunsanwo said.
As at January 2016, LIRS collected about N24.5billion for Lagos State, which is about 98 percent of its monthly target.
