In the midst of recession, Lagos records NGN287 billion revenue

Ogilvy Africa

Lagos, Africa’s fifth largest economy said it surpassed its revenue for last year by 7%. The result is not only surprising but commendable given Nigeria’s economic woes in the past 11 months.

On a year on year basis, Lagos state generated NGN287 billion so far this year compared to NGN268.2 billion posted for the entire of last year.

The state governor, Akinwunmi Ambode, attributed the rise in revenue in spite of the recession the country is witnessing to the commitment and faithfulness of taxpayers in the state.

At an evening of appreciation held for corporates, businessmen and civil servants, the Governor appreciated the state’s residents and taxpayers for supporting the state by paying their taxes.

However, there is a plausible explanation for this positive earnings. Since the Ambode took the reigns of power from Babatunde Raji Fashola, his mantra has been ‘efficiency’ and ‘low cost’ of governance. Lagos state has not really grown its tax net beyond its threshold for last year.

According to the state government’s statistics, there are about 7 million taxable adults in the state. Only about 2 million pay personal income tax as at 2014.

The 7% jump in revenue must have been achieved by measures put in place to ensure that the Lagos State Inland Revenue Service, LIRS is reporting accurate figures, cut corruption in its system by cutting red tape and bureaucracy that cause revenue loss.

Corruption has been seen as a major bane why most states record less and less revenue even in boom times. For Lagos state, it is not an exception. In August, the Chairman of the LIRS, Mr. Olufolarin Ogunsanwo, was sacked for financial mismanagement. Unconfirmed reports alleged that Olufolarin was fired for not being able to account for about NGN4,2 billion belonging to the tax agency.

There are suggestions that should the state embrace the use of technology in managing its tax system from an end to end basis, there are possibilities that the state’s internally generated revenue could continue to grow by double digits in the next five years.

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