TheCable

The Nigeria Governors’ Forum (NGF) has asked entrepreneurs in the informal sector and workers to comply with all relevant tax obligations in the country. 

Kayode Fayemi, Ekiti state governor, made the call at the 7th NGF internally generated revenue (IGR) learning event in Abuja.

Fayemi said the marginal growth in the IGR of states recorded a decline of N43.15 billion in 2020.

“Although the COVID-19 pandemic contributed strongly to the decline recorded, our tax effort (tax-to-GDP) as states is estimated to be less than 3 percent,” he said.

“Advancing beyond our current revenue levels will warrant more systemic reforms to address low tax morale and voluntary compliance by taxpayers.

“The growing wave in tax avoidance and evasion, especially among the informal sector, is not unconnected with their belief that such cognitive dissonance is right.

“Such justification is often predicated on the principle of reciprocity and economic exchange for which they fault the government’s commitment.

“Thus, where these incalcitrant taxpayers perceive a weak social contract, they call to question the legitimacy of taxes imposed on them by the law.”

Fayemi, who also doubles as the NGF chairman, said taxes gotten from businesses and individuals will not only be used for social infrastructure but also for health financing initiatives for Nigerians.

“This redistributive measure, tax-for-service, is intended to bring about additional funding for healthcare, improve service delivery, promote trust in government and strengthen the legitimacy for taxes collected,” he added.

In his remarks, Muhammad Nami, executive chairman of the Federal Inland Revenue Service (FIRS), explained that tax payments are the “price paid in anticipation of decent living conditions”.

He asked subnational governments to adopt the right tax policies that will ensure adequate funding for social-economic infrastructures.