DEBUNKING THE MYTH OF THE HIGH IGR IN LAGOS STATE

There is this popular propaganda that the Tinubu led Lagos APC has been propagating for years and it is the hallucination that Tinubu increased the IGR of Lagos from N600 million per month to N6 billion per month while he was in office as Lagos state governor and that his surrogates in office have since increased it to N50 billion per month as at today. In my last article I explained that it was the rapid increase in the GDP of the country under the Obasanjo administration that was directly responsible for the increase in IGR of Lagos state as most of the companies in the organized private sector that grew exponentially in the Obasanjo years have their headquarters in Lagos and their staff pay their income taxes to Lagos state government.

Bearing this in mind, if we consider that it was Atiku Abubakar who was in charge of the economy in this period of rapid growth, it is safe to say that even Atiku who Tinubu is contesting against to be president contributed more to the increased rate of IGR in Lagos state than the man that loves to claim credit for ‘building’ Lagos state.

But the question arises; is the IGR of Lagos state really high when we take into consideration the GDP of the state and contrast it with that of other states?

A very conservative report puts the GDP of Lagos at $76 billion and if we convert to Naira using the current parallel market rate, we will get an annual GDP of N54 trillion. If we consider the fact that the current documented IGR of Lagos state is still less than N600 billion per annum, this will mean that the IGR of Lagos state is just over 1% of the GDP of the state. When we deduct non tax revenues from the IGR, it means that the tax to GDP ratio of Lagos state is less than 1% which is extremely low for any state, country or region in the world.

If we do a comparative analysis, states in neighboring African countries have a tax to GDP ratio averaging 15% while in South Africa it is about 25%. For most European countries it’s and average of 30% while states or regions in the Scandinavian countries have a tax to GDP ratio of as high as 40%.

Effectively speaking if Lagos was matching up to states in neighboring west African countries in terms of IGR, then the IGR of Lagos state should be in the region of N8 trillion per annum and if it were to match up to the performance of her South African counterparts, then we should be talking of IGR in the region of N13.2 trillion per annum for Lagos state based on the size of the GDP of the state instead of celebrating a paltry amount which amounts to less then 1% of the state’s GDP.

One begins to wonder what is responsible for such a wide disparity between the IGR of Lagos and that of states in other African countries but the answer is not far-fetched. Contrary to the popular perception, Lagos has been doing a very poor job of collecting IGR with their fixation on the organized private sector that employs less than 5% of the citizens in the state while leaving the informal sector that employs the remaining 95% for their party loyalists and cronies to extort. This is apart from the fact that a huge part of the revenue accruing to the state are not accounted for owing to the opaque system the state operates and the use of dodgy tax consultants.

Regarding the revenue losses in the informal sector, the transport subsector is easily the biggest sector of the Lagos economy, however it remains mostly unregulated and the control left under the care of touts and agberos who also double as political thugs for the ruling party during the time of elections. Various reports indicate that these touts extort as much as N180 billion per annum from transporters in Lagos and this money is shared with their political godfathers who look the other way while they have allowed them to institutionalize their crime of extorting transporters in broad day light. In a well-structured system taxes, permits and licenses
levied on transporters should accrue to the government as part of the IGR but in Lagos, it ends up in private pockets.

Another major revenue source is from levies and taxes imposed on market men and women in the state but instead of allowing the agents of the State and Local government to collect these taxes for the benefit of all, the collection has been privatized and turned into the personal benefit of the daughter of a prominent politician in the state thus making the state lose another major source of revenue to personal greed of a few.

Yes given the pathetically low standards that we have been subjected to in the country and lack of information by many of us, the IGR of Lagos may seem high but the reality is that the IGR of the state is extremely low compared to what it should be and a huge chunk of the revenues that are meant to be accruing to the state are finding their ways into private pockets.

It is only when we as Lagosians say enough is enough and join hands together to vote out the ruling APC hegemony that has turned itself into a parasite hemorrhaging our state, that we will be able to put our resources together to build the Lagos of our dreams. I can’t wait to breath a breathe of fresh air in Lagos state.

Tinubu and his geng have always been riding on falsehood, lies, deceit and propaganda

Softmirror:
THE OP IS WASTING HIS TIME.

Wasting time or not, what is wrong with setting the records straight?

Lagos IGR is simply Nigeria States taxes transferred to and collected by Lagos State for taking care of the center.

Why should Shell be paying taxes to Lagos State without a physical operational presence while nothing to Abia State with facilities here and there? That's the mystery of Lagos State IGR.

Shell also apologized to the government and people of Abia State, particularly the oil-bearing communities in the state, for their long years of neglect, including its inability to return the tax to the state

https://www.vanguardngr.com/2018/08/weve-not-done-enough-for-abia-shell/amp/

You can imagine the unwritten Constitution we have and operate in Nigeria. Taxes meant for Imo State and Abia State from Shell SPDC are paid to and collected in Lagos State.

LadyExcellency:
Lagos IGR is simply Nigeria States taxes transferred to and collected by Lagos State for taking care of the centre.

Why should Shell be paying taxes to Lagos State without a physical operational presence while nothing to Abia State with facilities here and there? That's the mystery of Lagos State IGR.

You can help yourself end your frustration

But only one rope is available.

Use it wisely

KingKO22:


You can help yourself end your frustration

But only one rope is available.

Use it wisely

I don't know why Nairaland allow clowns to join intellectual conversation and debates on the board thereby making mess of the purpose of the forum

LadyExcellency:
Lagos IGR is simply Nigeria States taxes transferred to and collected by Lagos State for taking care of the center.

Why should Shell be paying taxes to Lagos State without a physical operational presence while nothing to Abia State with facilities here and there? That's the mystery of Lagos State IGR.



You can imagine the unwritten Constitution we have and operate in Nigeria. Taxes meant for Imo State and Abia State from Shell SPDC are paid to and collected in Lagos State.

Petroleum Profit Tax, Company tax and royalties on oil production are paid to the federal government. What state governments collect is income tax of the employees of companies who are resident in their states. What Shell pays to Lagos state is the income tax of her employees who work in Lagos, income tax of employees who work in Imo, Abia or any other state will be paid to their respective states.