RMAFC Emphasise Need for Sub-nationals to Improve IGR

Proshare

Thursday, August 27, 2020 / 12:45 PM /by  CSL Research / Header Image Credit: Channels TV

 

According to local print media sources, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has called on sub-nationals (State & Local governments) to improve Internally Generated Revenue (IGR) as the Federation account is stretched. This comes as the slow down in economic activities as well as downturn in oil prices amidst lower crude output has significantly reduced the nation's non-oil and oil revenue collections. As a result, it has become imperative for governments at all levels to devise creative ways of managing the current fiscal challenges.

 

Over the years, state governments have been heavily reliant on FAAC distribution to meet recurrent expenditure. This has often resulted in the inability of sub-national governments to pay civil workers' salaries during periods of macroeconomic downturn occasioned by  downturn in oil prices which reduces FAAC allocations. According to the 2019 Internally Generated Revenue at State Level report published by the National Bureau of Statistics (NBS), FAAC allocations made up 65.0% of state governments' total revenue while IGR represented just 35.0%. Of the 36 states and FCT, only 3 states (FCT, Ogun, and Lagos) had above 50% of their Revenue from internally generated sources.  

 

In our view, several measures could be employed by states to improve internal revenue generation. First, the state governments' tax authorities need to expand their tax nets to capture more qualified taxpayers. This, rather than introducing new taxes can help drive tax revenue collection without hurting growth of businesses within the state. In addition, we believe the Federal Government needs to relax its control on some state owned resources in order to enable the states better exploit such resources to boost IGR. Lastly, we note that states that generate decent levels of IGR (Lagos, Kano, Rivers and FCT) have relatively higher levels of economic activities. Thus, policies by state governments to foster favourable business environments should be implemented to attract businesses and industries.    

 

Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd.


Related News

  1. Unemployment - Sub-Nationals in Focus - Imo State Records Highest Unemployment Rate of 48.7%
  2. Heavy Weight of State Government Debt
  3. IGR Still in Need of a Boost
  4. Coronanomics (18) - Selected Sub-Nationals: The Different Faces of Trouble and Redemption
  5. Coronanomics (17) - Sub-Nationals: Digging Deep, Wide and Hard
  6. No Respite for State Government Finances
  7. Accessing the Needed Liquidity from State Owned Assets in the Face of Current Economic Realities
  8. N1.33trn Generated As IGR in 2019 - NBS
  9. FSDH Group to Engage 3 Nigerian Governors in a Webinar Session on May 22, 2020
  10. FSDH Becomes first Merchant Bank Enlisted in the Lagos State EBS-RCM for Revenue Collection
  11. States Need To Re-Strategize IGR And Industrialization During and Post COVID 19 - Teslim Shittabey
  12. Mounting Fiscal Pressures on the States; FAAC Payout Amount to N582bn in March 2020
  13. COVID-19 - Giving Alms and Tightening Security Will Bring Relief To Citizens - John Wesey
  14. Why There Is A Need for VUCA-lized Leadership To Address The COVID-19 Pandemic
  15. State Governments: Another Cycle of Non-Payment of Salaries to Begin Soon
  16. CoronanomicsWatch: LGAs Have A Key Role In Containing COVID-19 In Nigeria - John Wesey
  17. Ondo State Govt Nominates Kayode Falowo as Chairman for COVID-19 Response Fund Committee
  18. Fragility of State Government Finances
  19. Can Privatization of Government Owned Enterprises be Instrumental to the Economy's Sustainability?
  20. Invest in Oyo - The Pitch, Frank Talk and Optimism

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
READ MORE:
Related News
SCROLL TO TOP