Improved IGR, critical to increasing Nigeria’s non-oil revenue, says World Bank

Strengthening mechanism for increased internal revenue
generation is critical to the expected increased revenue in the
non-oil sector, Yue Man Lee, World Bank Senior Economist, has
said.

Lee said this on Tuesday in a paper she presented at the ongoing
3-day National Council on Finance and Economic Development
conference, holding in Kaduna.

The paper was entitled “Strengthening States Revenue Performance
through Transparency and Open Government.’’

Lee observed that Nigeria’s revenues were very low due to
contraction in oil revenues and the stagnancy in the non-oil
revenues which she attributed to the absence of stable tax policy
reforms and weak tax administration.

She said that with no improvement in revenue collection, total
spending would decline; debt would increase while fiscal space
would shrink.

The expert noted that the government could not deliver on its
social and development agenda without it increasing total public
spending.

According to her, the only mechanism to increase government
expenditure in a sustainable way is to triple total revenue through
mobilising non-oil revenue.

“However, Nigerian tax perception survey shows low tax
compliance due to weak transparency and accountability.

“Corporate income tax is less than six per cent of registered
taxpayers, personal income tax shrinks to two per cent, while
compliance in the case of VAT varies between 15 and 40 per
cent.

“This is worrisome because low tax compliance reduces states
revenues and strengthening revenue and increasing expenditure
efficiency needs to be underpinned by an increase in transparency
and accountability.”

Lee, however, said that the Nigerian states could increase
transparency and accountability to strengthen IGR through
harmonisation of revenue collection and automation of tax
payment.

“Empower revenue agencies as the sole agencies responsible for
revenue collection and accounting, established a consolidated
revenue account and development of a monitoring dashboard to track
collection in real time.

“Kwara and Kaduna States are good example of states where such
reforms were initiated with a significant increase in IGR,” she
said.

Meanwhile, the Accountant-General of the Federation, Ahmed
Idris, said that automated collection and management of non-oil
revenue was critical to increasing its performance in revenue
generation and sustenance.

(NAN)

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