LIRS projects improved tax revenue
The Lagos State Internal Revenue Service and the Federal Inland Revenue Service on Monday signed a memorandum of understanding to improve revenue generation through tax.
The signing which took place in Lagos was witnessed by the State Governor, Mr Babajide Sanwo-Olu; Chairman, FIRS, Muhammed Nami; and Chairman, LIRS, Ayodele Subair, among others.
Speaking at the event, the LIRS chairman said the collaboration gave his agency the power to look into the affairs of corporate entities and block revenue losses.
Subair said, “We all know the world over that tax is the most sustainable source of revenue for funding all the lofty objectives of the state government and the federal government also. So, we look forward to a very successful collaboration with FIRS.
“It’s mainly around sharing of information, around the ability to fish out all the recalcitrant, especially high-net-worth individuals who take advantage of the fact that there is Federal Inland Revenue Service that regulates basically the limited liability companies, the corporate entities, while the subnationals, the state internal revenue services generally regulate the tax laws around individuals.”
He added, “So, we know the practice in Nigeria. A lot of high-net-worth individuals make a lot of their personal expenditures through their corporate accounts.
“Now, the state is not empowered to look into the affairs of corporate entities, we can only look into the affairs of individuals, and thereby, the state loses a lot of revenue which is very important for the provision of critical infrastructure. There’s a huge infrastructure gap in a state like Lagos where we have about 25 million people and funding is quite limited; the state is really, really stretched.”
He said Sanwo-Olu had a lot of good plans for the state but without the funding, it would become difficult not just to provide infrastructure “but also to provide qualitative services like education and that health that are needed.”
The FIRS chairman urged Lagosians to trust the government and to know that civilisation doesn’t happen by accident but by the actions of citizens.
He said, “If you travel to the UK and other developed economy and developed world, it is the citizens of those countries that pay for the civilisation that we go to patronise on a daily basis.
“The hospitals and schools with state-of-the-art infrastructures that are in those jurisdictions are made possible with taxpayers’ money. And to assure Lagosians that with this government having additional funds, a fourth Mainland Bridge is possible, Lekki International Airport is possible and other critical infrastructure Lagosians require from the government will be made possible.”
On what led to the collaboration, he said, “The most important thing is for us to raise revenue. For us to be able to do that, we had to ensure automatic exchange of information, we had to do a joint audit, and we had to block revenue leakage. These are things we set out to do in order to be able to realise more funds for Lagos State and the entire country through this collaboration.”
Appreciating both chairmen for the collaboration, Sanwo-Olu said it didn’t happen by chance but was inspired by the need to improve the quality of infrastructure in the country.