NGF: Weak Social Contract, Threat to Tax Legitimacy, Blames Insecurity for Low Revenue Drive
Director General of the Nigeria Governors' Forum (NGF), Asishana Okauru
James Emejo
The Director-General, Nigerian Governors’ Forum (NGF), Mr. Asishana Okauru, has said the perceived weak social contract between citizens and the government had continued to threaten the legitimacy of taxation in the country.
He also said tax compliance is affected by weak transparency and accountability by the government and state revenue agencies.
Okauru, spoke at a workshop organised by the States’ Fiscal Transparency Accountability and Sustainability (SFTAS) Programme Coordination Unit of the Federal Ministry of Finance, Budget and National Planning in Abuja.
In his presentation on, “Improving Internally Generated Revenue (IGR): Trend and Emerging Reforms,” he said the development had made tax collection difficult as many feel discouraged to pay because they doubt the monies would be well-utilised for developmental purposes.
The Senior Programme Manager, NGF/SFTAS, Lanre Ajogbasile, represented the NGF DG.
He also blamed the worsening insecurity and challenging economic environment for the states’ low collection of internally generated revenue (IGR).
He said the effectiveness of the social contract between the government and its citizens would determine the quality of public services and the public’s willingness to pay or evade taxes.
According to him, the government must play its part of fulfilling the social contract by judiciously utilizing tax revenues for developmental purposes.
Okauru, said the country was still recovering from the impact of a number of negative fiscal and macroeconomic conditions that had influenced fiscal sustainability at all levels of governments, adding that the pressure on the states remained enormous.
He reiterated calls for states’ financial autonomy adding that their over-dependence on the monthly allocations from the federation accounts had been affected by the unpredictable movements in the earnings from crude oil exports as a result of the volatility in crude oil prices at the international market.
He said, “The impact of this pressure has been exacerbated by long years of increases in government permanent expenditures arising from increased cost of governance, new minimum wage, rising debt service and mounting fuel subsidy payments.”
According to him, the global COVID-19 pandemic had taken a huge toll on the economic activities of governments globally thereby impacting the IGR capacity of the sub-national governments.
He said as a result, the IGR of the states and the FCT, declined by N28.15 billion, or 2.1 per cent, between 2019 and 2020, primarily as a result of the pandemic.
