Should Edo Generate only N2.8billion IGR Monthly or more?

by Bob MajiriOghene Etemiku

A news report on the front page of The Nigerian Observer of Tuesday May 4, 2021 came with a caption, Edo Deploys Big Data in tax administration as Monthly IGR climbs to N2.8billion. The rider of that caption also said that IGR in Edo ‘ranks 2nd behind Lagos in number of taxpayers with TIN’. Details of the report on page 2 of The Nigerian Observer indicated that the assertion was made by a government official, Nidu Inneh, Chairman of the Edo State Internal Revenue Service, in a paper titled, Taxation, Rule of Law, and Voluntary Compliance – Role of the Nigeria bar Association at a programme organised by the Nigerian Bar Association in Benin City. According to the report, Inneh said that ‘our individual data capture has grown from 160,000 in 2017 to 515,453 as at May 2021. Edo ranks 2nd behind Lagos in total number of taxpayers with TIN’.

A few days before this publication, another statement was ascribed to Edo state governor, Godwin Obaseki during the May Day Celebrations at the Samuel Ogbemudia stadium. The statement was reported by Daily Trust of May 2, 2021, with the title, ‘Only 200,000 people pay taxes in EdoObaseki. Daily Trust quoted Obaseki as saying: It’s unfair for only workers to be paying taxes. Out of the almost two million taxpayers in Edo, not more 200,000 people are paying taxes’.

Either the state government is lying about generating N2.8billion monthly, or that it actually generates more than that, but is being economical with the actual figures. This analysis begins from the claim made by Godwin Obaseki that only 200,000 workers pay taxes. If only 200,000 workers are paying taxes in Edo, how does that add up to N2.8billion monthly? First, most of the civil servants that the governor claims are the only ones paying their taxes from an ‘individual data capture’ earn less than N30, 000.00 as minimum wage. Let’s just say that if each of the 200,000 people the governor says pay tax earn N100,000 monthly as the monthly pay of a director in a ministry, and if each were to pay a tax of N10,000.00 monthly, simple arithmetic indicates that that would translate to a couple of millions.

But are there other people who should be paying or are paying their taxes in Edo state that the state governor did not say?  In the light of the death of industries like the Bendel Brewery, Ethiope Publishing, Edo Line, and etc, the only industries viable enough seem to be private schools and the socials – travel abroad, transportation, etc. The Hotels are struggling and so is the tourism industry.  Irregular transporters pay to uniformed touts. So we made an FOI request to the Edo State Internal Revenue Service, seeking a record of all tax remitting private hotels and private schools in Edo State. We did not get a report of tax paying hotels in Edo state but the report provided by the Edo State Internal Revenue Service reveals that in Edo state alone, there are over four thousand private schools, and each remits taxes to the government. We are not sure what the figures are (some big government officials always play god when you call them for info), but if those private schools were to remit N400, 000.00 per annum to the Edo state government that amount would translate to about N1.6billion in one year. Add that to what the Edo government gets from the formal sector, and the monies don’t get anywhere near the figures being touted by the Obaseki government (almost N30billion annually).

We are not that sure of these figures, and this is because for the most part of 2020, virtually all businesses all over the world were shut down because of the Covid 19 Pandemic. Nobody did any serious work that would generate any reasonable income that warrants a tax to government. And as a matter of fact, it would be very unfair and foul for government to have taxed the informal sector when worldwide there was a pandemic that required people to remain at home. Matters were even bad that palliatives for home-staying Nigerians were hidden in warehouses for politicians to distribute on the politicians’ birthdays.

The figures we are sure of include that from the 2018 Edo State Budget. In that year, the government listed over 30 private companies that it proposed to get up to a billion naira from in taxes. They include private establishments like RT Briscoe, AG Leventis, Rubber Estates of Nigeria, UAC of Nigeria, Guinness Nigeria Plc., Nigerian Breweries, Paterson Zochonis Industries, Oando, Dunlop, Cadbury, Dunlop, Edo Cement and K Chellarams. Apart from these, there are all manner of statutory taxes which mop up a couple of millions here and there for the Edo State government.

There is a belief in certain quarters that as a matter of fact, that the Obaseki administration actually generates close to N30billion IGR annually. We do not know if such a position is backed by a political undertone to try to engage and interrogate Obaseki on issues of transparency and accountability of public funds. We are not a part of that assumption. But let’s just focus on our analysis and suppose that Edo actually generates N2.8billion monthly. Add that to N58billion Federal allocation in 2020 and include what the state gets (13% of Mineral Revenue) as an oil and gas producing state.  The monies translates to several billions of naira.  Unfortunately though, these billions have not translated to the uplift of the Edo people, and those who call Edo home. With an Azuri Power plant completed, power supply is still at its epileptic best, and our markets are some of the dirtiest in Nigeria; with contracts for roads awarded, the roads are still dilapidated and decrepit, an unworthy spectacle for a state as endowed as Edo; with so much hype about digitalization and hubbification of social enterprises for small scale businesses, youths are largely unemployed and underemployed; with all the so-called reforms in the education sector, nearly every government owned tertiary institution is under lock and key.

What the government can do now to rev its economy is by resuscitating some of the dead industries that once made Bendel Bendel: in one of our reports, WADONOR of October 2020, Dead Niger Delta Industries, we highlighted some of these industries: the Bendel Brewery alone can generate billions for Edo state and employ a quarter of those youths seeking greener pastures through the deserts; Bendel Insurance, Ethiope Publishing, the Textile Industries. While the Edo part of some of these industries went under, some in Delta state are up and running, and generating billions and making that state very rich together with its Federal allocation.

Edo state has no business going cap in hand to Abuja for printed monies. The state is like a mini Nigeria, with rich soil, temperate weather and with some of the most hardworking people there once were. Edo government will need to reform its tax administration and its policies, rein in the tax chaps on ground on the streets and at the offices at Forestry road. Our investigations reveal as well that rather than pay taxes to Edo, for instance, to procure a CofO for one’s land in Benin, most tax payers pay to Delta State. Edo also needs a Samuel Osaigbovo Ogbemudia or an Ambrose Folorunsho Alli or their clone to redirect and position Edo for greatness.

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