That Lagos has been experiencing steady transformation since the restoration of democracy in 1999 is not in doubt. Almost every sector in the state is experiencing steady progress. From the health, education, environment, finance to the transport sector, the state government has been working relentlessly to lay a solid foundation for a virile state.
Perhaps more significant is the state government’s success in tapping into the resources of business community in the state. The state government has effectively cleaned up its finances to the point where it can seamlessly convince investors to take up a series of bonds offered to finance infrastructure projects in the state.
Expectedly, a lot of factors have been construed, in different quarters, as being responsible for the modest success of governance in Lagos. For instance, many have tied the Lagos success story to the quality of leadership on display in the state from 1999 till date. To those who hold this view, Lagos has been blessed with visionary, innovative and dynamic leadership that has a passionate commitment to connecting with the people, particularly the ordinary folks on the street, and building their trust in the sincerity and noble intentions of government.
However, of all the propounded success theories, the one which really stands out and deserves close scrutiny is the financial engineering perspective. Today, Lagos stands out as one of the few states in the country that could really boast of an economy that is truly independent of handouts from Abuja. And it all started with the Bola Tinubu administration in 1999. Though it inherited a struggling economy from the Marwa administration, by the time it was leaving office in May 2007, the Tinubu administration had increased the state’s revenue base from a meager N600 million to over N10 billion. That the administration survived during the period when the state’s local government funds were seized by the then federal government was mainly due to its robust revenue portfolio.
Subsequent administrations in the state have since continued to raise the bar in terms of Internally Generated Revenue (IGR). For instance, in 2016, total revenue of N436.328 billion was realized compared toN399.382 billion in 2015. In relative terms, the revenue performance was N36.946 billion more when compared with that of 2015. Total IGR for 2016 was N312.820 billion which represents 75% of the projection and 72% of total revenue, compared with N247.946 billion representing 80% of the projection and 69% of Total Revenue for year 2015.
Lagos State Internal Revenue Service’s (LIRS) revenue for 2016 was N247.022b representing 80% of the estimate, 79% of total IGR and 57% of total revenue when compared to N225.041 billion which represented 81% of the estimate, 79% of IGR and 56% of total revenue for the year 2015. LIRS was able to achieve this feat because of the strategic reforms introduced in the area of revenue collections
From this, one thing that is quite clear is that the concept of taxation is gradually gaining ground in Lagos State. This, no doubt, is a welcome development. All over the world, without taxes to fund its activities, government could not actually exist. Governments use tax revenues to provide jobs, build dams and roads, operate schools and hospitals, provide medical care and for hundreds of other purposes. Taxation is used in developed countries as important tool for maintaining the stability of a country’s economy. Payment of tax in turn empowers citizens to demand, not beg, that government fulfills its responsibility. It makes the people more conscious in monitoring government and holding public officers more accountable for their use of public resources.
It is in this wise that Lagos State is charting the course that the nation is expected to follow in order to ensure sustainable development through the diversification of our national economy away from oil. With its army of faithful and committed taxpayers, the State has proved that the country can build an economy that is more productive and not completely reliant on oil. On its part, the state government has been making efforts to convincingly justify why Lagosians must pay tax through prudent management of public funds and the numerous developmental projects it has completed as well as hundreds of ongoing projects.
It needs to be stressed that, there is no magic wand that can bring development in any society without the availability of required resources. The most successful democracies in the world where governments are accountable to the people are the ones with a strong institution of taxation. Late sage, Chief Obafemi Awolowo, puts the matter with characteristic clarity on the floor of the House of Representatives in Lagos on 16th august, 1954, when he said: “…I would therefore wind up by saying that we, on the threshold of this new constitution, are on the cross roads; there is that broad, smooth road, with promises of no taxation, and efforts to get money from other places, leading nowhere but perdition, poverty, disease and economic enslavement; and there is the other road people who go therein pay tax. They also have to apply self-help and self-sacrifice to get where they want. But this road, Mr. President, leads to success, prosperity and to the exploitation of natural resources by the people of this country …”
From the late sage’s exposition, it is evident that the significance of taxation to the growth of any economy cannot be over emphasized as it is the major tool by which societies can develop. Obviously, any society where there is proven development must be one where the twain issues of taxation and careful administration of public finance are taken seriously. It is, therefore, in order to move Lagos to the league of such societies that the State Government has been encouraging individuals and corporate organizations to pay their taxes, as this will help the state boost its revenue and carry out its responsibilities to the citizens.
Increased IGR through a robust tax administration process is critical to sustaining investment on infrastructural development. For our society to achieve the kind of development being witnessed in developed climes, the issue of taxation must be accorded utmost importance by all and sundry. There is no other alternative to this. This is the reality and any analysis to the contrary might not really hold water. To this end, the public needs to be educated on the fact that no strategic planning or vision, no matter how well meaning, could really yield concrete results in a mega city like Lagos except the needed funds are readily made available.
Being a melting pot of people from diverse parts of the world, Lagos has peculiar infrastructure needs. Therefore, taxable Lagos residents must continue to partner with the state government through prompt and regular payment of taxes.
Meanwhile, it won’t be out of place to celebrate Lagos tax payers, who are really the game changers in the state’s constant drive for development.
Ogunbiyi is of the Lagos State Ministry of Information and Strategy, Alausa, Ikeja.