The 36 state governors disclosed yesterday that their economies grew from N686 billion to N1.2 trillion in six years.
Ekiti State governor and chairman of the Nigerian Governors Forum (NGF), Kayode Fayemi revealed this at the 7th NGF IGR Learning Event held In Abuja.
According to him, recommendations from the annual peer review event, continues to provide state governors with invaluable guidance on reform prioritisation year-on-year and over the last six years domesticating various reforms advocated by their platform.
He said “States have recorded a compound annual growth of 12% from NGN687 billion in 2015 to NGN1.21 trillion by 2020. These reforms consist of legal revisions, policy directives, institutional restructuring, and technological innovations to improve tax administrative processes and procedures.
“Still, the marginal growth in the IGR of States recorded year-on-year from 2016 peaked in 2019 and recorded a decline of NGN43.15 billion (3.4%) for 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%.
“Advancing beyond our current revenue levels will warrant more systemic reforms to address low tax morale and voluntary compliance by taxpayers.”
Fayemi further stated that 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.
He stated that such justification is often predicated on the principle of reciprocity and economic exchange for which they fault the government’s commitment.
The NGF chairman noted that this is where these incalcitrant taxpayers perceive a weak social contract, they call to question the legitimacy of taxes imposed on them by the law.
According to him” whilst we remain resolute to deliver on our mandate as elected officials, we are confronted with economic and socio-economic challenges beyond the fiscal space we have.
“This is what has caused us to aim for “as close to even” development as we can deliver, a compromise non-beneficiaries will continue to fault us for.
“This is despite social intervention initiatives, programmes and projects we have introduced to service various disadvantaged spectrums of the population including the poor, vulnerable and unemployed.
Nonetheless, Fayemi said governors must stand up to the trust placed in them as chief executives of states, and devise a more equitable social minimum, sustainably funded to strengthen their social contract with the citizenry.
To this end, he said this learning event and the tax-for-service (TfS) initiative is timely and strategic to our desire to achieve universal health coverage for all Nigerians.
Fayemi lamented that health financing has remained a challenge not just for us as Government but for citizens who periodically pay huge sums out-of-pocket for healthcare.
He explained that “this is the situation, as less than 5% of our population is covered by any form of prepayment mechanism for healthcare. High out-of-pocket payments for healthcare has been proven to be highly regressive and a major barrier to seeking treatment for many.
“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.
“As you subject the year-long research work done by the NGF Secretariat to a constructive discourse, bringing to bear your individual experiences and contextual State peculiarities, it is our expectation as a Forum that you avail us a fit for purpose implementation plan to run with, improve States’ IGR and deliver better healthcare to the people,” he stated.