To do that the governor realized he to radically change the method of raising resources to fund his developmental projects and I the short period he has been in office, succeeded in creating a means of collecting Internally Generated Revenue (IGR), that is quite creative and sure to maximize the potential of the sleeping giant that is Kaduna state.
Kaduna State is the third most populous state in Nigeria, with a population of about seven (7) million people but gets between N4.5 to N5 billion monthly from the federation account with an internally generated revenue of only about N700 million.
Between May 2011 and April 2012, the state has generated about N10 billion, got about 61 billion naira from the federation account and a paltry N9bn from value added tax. Of this amount, recurrent expenditure and pension and gratuity gulped about N26 billion. Add, overhead cost, and the huge expenditure on security, this will make the informed appreciate why the governor had to set up and chair the high powered committee on revenue generation.
The committee’s work is to ensure the prudent management of resources and to continue to block leakages in the system.
Studies show that most states only collect a fraction of their total revenue as Internally Generated Revenue. The implication of this is that bulk of their revenue comes from the federation account and Value Added Tax (VAT). In this wise, when Abuja fails, states are always in terrible mess.
To change this ugly trend, Yakowa inaugurated a 21 member committee to identify workable strategies towards collecting the revenue through a critical examination of the internal revenue machinery and the implementation of the report of the committee.
From the report of the revenue strategic objective committee, the immediate objective of government is the funding of the entire overhead expenditure of the state government in the short term and in the long run, the more than 4.3 billion naira huge monthly wage bill of the civil service from Internally Generated Revenue. The question most people have been asking is whether the state government has the capacity to achieve this target.
But the indications so far are looking good as the initiative has substantially increased of the IGR. Figures from the ministry Finance showed a 40 percent increase in IGR between January to June 2012, in comparison to the same period in 2011, and this is in spite of the security challenges. It can be made better if professionals who have the habit of charging scandalous fees, but are only willing to pay 3,000 naira a year as income tax, pay what is appropriate and commensurate with their income.
More importantly, if only the elite who talk the most, but never pay their ground and water rates and if only some vehicle Inspection Officers will work for the common good and not themselves, Kaduna State would be free from the “slavery of federation account.’’
It must be understood that payment of tax has never been popular. Some Libertarians see it as “government aggression,” but the fact remains that governments in this case Kaduna State, has a responsibility to provide services, infrastructure, security etc. Taxes alone can never provide the entire revenue that any government needs. But it can at least substantially meet the need. And this is what Yakowa wants to achieve.
As the duty of government remains to ensure that revenue collected is judiciously spent on the well being of the people, the people should also play their part in the social contract – by paying taxes. This guarantees them the right to ask questions.
The Yakowa initiative is highly commendable because it is a total package which has critically blocked leakages in the revenue agencies and worked out a package of incentives to motivate revenue staff. It has also brought charges and rates which have been stagnant over a very long period of time, to new economic realities. The Inauguration of a governing board for the revenue board, engagement of consultants in the area of direct assessment, tax audits, motor vehicle licensing and ICT software platform to partner with the revenue board. The government has also, while embarking on an aggressive public enlightenment, set up a revenue court. Having ensured that it actually collects what is due to it, the Kaduna state government has now delved into the issue of untapped revenue.
Professionals from Abuja Geographical Information System (AGIS) are presently working with the state government to deliver a Kaduna Geographical Information System(KGIS), promulgation of new laws, like the hotel surcharge law, the exploration of mineral resources would be given a big push when the on -going geological mapping of minerals in the state is completed.
The committee has shown evidence of knowledge and foresight. Presently it is looking at the possibility of a single agency, to collect local government council revenue, just as it is looking at the issue of multiple levies. The comprehensive review and update of existing internal revenue sources, payer database of local government councils and the development of an e-based internal and accounting machinery would definitely re-position this all important tier of government for service.
We must support the efforts of Governor Yakowa, as he lays the basis for a better tomorrow
Ado is a media consultant to Governor Yakowa.
