By Zayyad I. Muhammad
Sir: According to the National Bureau of Statistics (NBS), Adamawa State is among the 10 states with the least Internally Generated Revenue (IGR) in the third quarter of 2019. The state also recorded a decline of 47.04% in revenue generation with only N6.8bn generated. This is not good for the state.
If no creative and feasible measure is taken, it would witness more decline in local revenue generation
Well, the situation is not only Adamawa’s; most states in Nigeria still battle with dwindling federal allocations; poor innovations on internally generated revenue (IGR); bloated workforces and fraud-riddled workers’ payroll.
It is a critical situation that requires critical measures. The state government should look at ways to generate revenue in the face of the declining federal allocations. In this, the government must move away from the ‘rocket-science’ approach to tax collection. We must admit that Adamawa State does not have flourishing economic activities that are profitable and easy to tax without upsetting common people.
The state needs a modified system of awarding ‘tax collection rights’ to investment firms. This should reflect Adamawa’s economy, culture, needs and environment. The state can enter into agreement with a firm to give government monies in advance for taxes from a certain sector, while the firm would then subsequently collect the money by operating as a tax agent for the state, through the famous tax auction systems.
For example, if it is projected that Adamawa’s revenues from taxis, buses and lorry services in a certain local council can generate one million naira a month, an innovative investment firm could agree to give a state government about 800,000 naira in advance. Then the firm will collect these taxes in the local council for that particular month. This type of arrangement can be implemented across sectors of the economy of Adamawa State using what operations researchers call the ‘reductionistic’ approach, whether monthly, quarterly or on yearly basis.
A good investment firm will make the tax collection efficient and fair by reaching agreements with taxpayers on how to pay and enjoy the incentives around this too. This type of arrangement can assist the state to have tax efficiency and tax fairness, and the government will relieve itself from the burden of tax collection and would have the needed revenues in advance (which could be up to a 10-year advance payment). It would also generate thousands of jobs, while government tax officers would be kept very busy in the area of regulations.
We must also remind ourselves that, many of us, including government officials, misunderstood or rather misapplied the use of consultants. The consultant’s major task is to support government in specific areas. Consultants are mainly catalysts for innovation and invention – they are simply, the resource, and the facilitator in tax administration. The leadership and ownership of the process still remains the government officials.
Land use charges are important instrument in revenue generation for government. The Adamawa State government should cash-in in that area. The Fintiri government should entirely overhaul and simplify the land title registration, ownership of Certificate of Occupancy (C-of-O) and documentation of all land transactions. Adamawa Geographic Information System should also be resuscitated while introducing seamless payment process for the land use charge as well as eliminate all multiple taxations.
There are thousands of unserviceable vehicles, farm implements and many types of electrical equipment. Governments can make money by auctioning such items. Furthermore, Adamawa State has some under-utilized buildings – completed and uncompleted, fenced and unfenced plots of land such as the liaison and guest houses in Abuja, Kaduna and Lagos. These assets are commercially viable. They can be leased or sold.
- Zayyad I. Muhammad, Jimeta, Adamawa State.
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