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Osinbajo: How State Governments Can Tax Nigerians, Generate More Revenues

October 13, 2019

Osinbajo urged states to do more to harness the entrepreneurial spirit
of Nigerians.



Vice President Yemi Osinbajo has challenged states in Nigeria to
explore ways of increasing their internal revenue generation and
boosting their agricultural production.

Osinbajo urged states to do more to harness the entrepreneurial spirit
of Nigerians.

The vice president stated this while delivering the keynote address at
the 18th Meeting of the Joint Planning Board (JPB) and National
Council on Development Planning (NCDP), in Asaba, Delta State capital.

He said, “states must engage in careful and well-thought-out strategic
planning in order to articulate and implement priorities derived from
strategic thinking based on comparative advantages.”

According to Osinbajo, the event themed, 'State Fiscal Sustainability
and Economic Diversification in Nigeria', reflected the common
commitment of the federal and state governments to work together in
planning the economic future of Nigeria and its people.

“Our ultimate purpose is to create jobs and growth and as key economic
managers in the context of Nigeria’s fiscal federalism, it is
essential that we work collaboratively and in tandem.  I am optimistic
that the deliberations of this council will contribute to achieving
these noble objectives, which will lead us closer to lifting the 100
million people that the president has promised that we will lift out
of poverty in the next 10 years,” he said.

He added, “I propose three things for the consideration of this august
body as a means of increasing production and generating the revenues
at the state level. First, I would urge that states engage in careful
and well- thought out strategic planning in order to articulate and
implement priorities derived from strategic thinking and based on
comparative advantages.

“Second, there is great scope for boosting agricultural production if
States choose two to three high-value crops/products to specialize in.
Such specialization will enable economies of scale in the provision of
support across the entire value chain of prepared land, seeds,
fertilizers, and pesticides, storage, processing and transportation,
marketing and sales. This also implies organizing the agro-allied
value chain from farm to table.

“In a similar vein, states must take advantage of the entrepreneurial
spirit of Nigerians by empowering economic clusters and trade groups
through the provision of basic infrastructure and shared facilities.”

Osinbajo noted that the current move of the federal government to
provide broadband connectivity for all by 2023 "will assist the states
productive base but they cannot charge fees for laying of broadband
infrastructure, which is like strangling the goose that will lay the
golden eggs".

However, he stated, "The complaint of many small businesses is the
multiplicity of levies and charges by state and local government
agencies. States should, in fact, invest in agencies that can help
small businesses comply with regulations and standards and access
credit. When the businesses grow and employ more they create taxable
profit and taxable employees."

The vice president, therefore, counselled state governors: "The key
thing is to think out of the box and utilize the opportunities that
are open to the state. Some would have advantages that can be readily
used in the area of tourism, others would be contiguous to major
economic centres like Lagos and Abuja which offer markets as well as
cheaper and more affordable land for residential and industrial

"Improving tax morale is also a very big part of the story as the
evidence shows that people do not feel obliged to pay taxes and they
justify this belief by asserting that they do not receive commensurate

"It would also be necessary for States to improve tax administration
and widen the tax net by making it easier for people to pay tax both
in terms of easier processes and lower levels of taxation."

Politics Taxes