Imo among Nigeria’s poorest states in tax revenue – Survey

Only Civil/Public Servants and less than 1.5 percent of registered companies pay tax in Imo.
By Chidi Emeagi

With the dwindling monthly federal allocations to States which is not helping matters as per meeting with the financial needs-wage bill, over head, infrastructure and otherwise, states across Nigeria are in for the worst and hard times in the months and years ahead.

Experts have long warned of the inherent danger in sole dependency of states on federal allocations hence neglecting the weightier matter which boils down to harnessing the internally generated revenue potentials in various states.

Currently, some states cannot pay salaries talk of doing any project without federal allocations as the they lack the political will and technical know-how to enforce their tax laws and increase their IGR base via well coordinated but less burdensome tax collection.

Apart from Lagos, Rivers, Ogun, Delta, Abuja and a few others, all other states in Nigeria have poor tax collection and payment culture. Imo, a southeast state is among the poorest and about the least in the comity of states without any form of serious tax payment regime.

Nigerian Newsguide learnt that Imo state monthly allocation is abysmally low to take care of the workers’ wage bill alone, let alone other vital projects and that was why successive governments in the State, consciously avoided pension payments.

Our reporter gathered that safe for the little support from poor IGR, grants from international agencies and Local Government allocations, Imo would have grounded to a halt long time ago.
Our findings however indicates that only civil/public servants whose taxes are deducted from source and less than 1.5 percent of registered companies and taxable adults pay taxes in Imo state. The implication is that over 5000 hotels, eateries, joints, bars super markets, exclusive shops, excluding manufacturing industries pharmacy shops, medical and other sundry money making ventures are either not in the Imo tax net or are deliberately evading tax payment to the extent that only about 50 of them pay taxes.

The state with the record of being the highest in hotel and fast food concentration per square meter is worst hit by tax evasion.
According to Joint Tax Board, there are over ten million, precisely 10,006,304 (only) registered for personal income tax purposes in the 36 states of the federation including FCT, out of this, about 4.6m or 46 percent are registered with Lagos Revenue Service, meaning that Lagos is the most tax compliant State and richest economy going by internally generated revenue.

A former Finance Minister Kemi Adeosun once revealed that 75 percent of registered companies in Nigeria are not in tax net and over 65 percent of those already in the tax net do not file returns or pay taxes at all and this is why states like Imo, Abia, Jigawa, Kebbi, Ekiti are economically unwell.

Experts have listed factors responsible for non compliance with tax payment to include incoherent fiscal policies, cumbersome and inefficient tax system, ambiguities in tax laws, use of consultants in tax collection leading to diversion, lack of awareness and lack of transparency regarding the utilization of tax revenue for social services and visible development.

Some interviewees who spoke to our reporter on poor tax payment situation advised Imo state government to be transparent in it’s daily dealings and provide good roads alongside other basic utilities that would entice taxable adults/companies and motivate them to make tax payments. They also submitted that the 1.2b Naira said to be monthly tax revenue in Imo should be projected to hit 5b Naira by middle of this year and aggressively go for tax drive from clubs, bars, hotels, restaurants, trade houses, bottled water and other manufacturing companies, etc that make millions of Naira even on weekly basis particularly in Owerri city and it’s environs.

They observed also that the State Inland Revenue Service most often give outrageous and unaffordable taxes to companies and individuals warranting those affected to evade payment. A case in point in this regard is according to our investigation, the charges for vehicle number plates which is cheaper in Ebonyi and Abia States than what is obtained in Imo State. This is the reason Ebonyi vehicle plate numbers are rampant in Owerri among commercial bus/taxi operators.

In Ebonyi State, our reporter gathered, a plate number goes for between 15 and 17,000 naira while same goes for between 33 and 36,000 naira in Imo State. They urged that awareness on tax payment be intensified to convince supposed tax payers on the need to pay taxes just as it is done in Lagos, Rivers, Abuja, Ogun, Delta, etc.

“How would you expect government to fix all the roads, hospitals, markets, public water supply system and many others when you shy away from your civic responsibility which is tax payment. It’s only in Imo that government spends fortunes to clear refuses generated by Imolites whilst those that generate them pay nothing, yet complain when government fails to cart them away with dispatch. We must change our mindset in this 2021 and begin to pay taxes due to us.

Government should go to federal institutions in the state like FUTO, Federal Poly Nekede, etc and demand tax remmitances from payee deductions made on workers’ salaries assuming there is no such remittances yet. The idea of allowing few fraudulent consultants to collect and remit to government must be stopped.
Again, private schools that is a booming business in the state should be harnessed to yield revenue commensurate to the millions they make each term or session”- an angry interviewee submitted.

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