Lagos State Governor, Mr. Babatunde Fashola, SAN, Wednesday, 28th January, 2015, thanked Lagosians for being tax-compliant in the last seven and a half year saying the decision in 2007 to take their destiny in their hands by paying tax has saved the state from the current fiscal difficulty engendered by the global drop in the price of oil.
Addressing the 8th Annual Lagos State Taxation Stakeholders’ Conference at The Haven, Ikeja GRA, Governor Fashola also urged residents to continue to pay their taxes as a means to make the state self reliant in revenue generation adding that any politician who told them not to pay tax was a liar.
The Governor recalled his predictions at the first Stakeholders’ Conference in 2007 that the oil price would not be sustainable and that in Lagos the only tool for survival and growth was an efficient, fair and equitable tax regime adding that the reality today, both nationally and in the state has justified the move to embrace taxation.
“The key is that these taxes which were duly imposed by your elected representatives on the age old principle of no taxation without representation, has been efficiently, fairly and equitably administered and we have done this conference year on year to improve tax administration, to make it fair and equitable”, he said.
Debunking the argument in some quarters that tax administration was predicated on government performance, Governor Fashola, who described the argument as apostasy, declared, “The dependence of taxes on income is the first principle of the Social Contract between the Government and the governed.
“It is an irreducible legal minimum of citizenship to pay your taxes and a breach of this law is a criminal offence. A non-tax compliant citizen is a bad citizen and a cheat because he is benefitting from a wealth he did not contribute to. You pay income tax, you pay Land Use charge and you also pay VAT. Land Use charge is tenement rate and ground rate that we have consolidated together for tax administration. This is the aggregate of monies that constitute revenue to our State”, the Governor said.
He expressed joy that all the prophesies made from 2007 concerning the fall of oil price and need for self-reliance as well as all the fore sights and all the warnings have been fulfilled adding, “Everything that we saw in 2007 when we held our first conference has happened, and you are living witnesses to it.
“When we first started this journey, in spite of all the hearsays, I promised you then that it would be a journey that would end well. Although, it is not finished, clearly, the result is self evident, that journey since 2007 has brought us to this glorious day”, Governor Fashola said recalling that last year, in this same hall, many of the residents raised their hands here and said that they now wear their tax compliance records as their badge of honour.
Buttressing the high rate of tax compliance in the State, Governor Fashola noted that from the Office of the Chief Justice records of cases involving tax evasion showed that only about 600 cases, in a population of 21 million people with an estimated taxable base of about 8 million people, went to court.
According to the Governor, “That is a massive record of tax compliance and it shows that the message and the prophesy has been fulfilled. We agreed that as a people it is illegal not to pay tax and that no politician seeking votes at the last minute, would then come and campaign to us and say ‘if you vote for me, you won’t pay tax. It is a lie.
“The debate should always be about how to make tax administration more efficient. If the taxing authority is the Federal Government, the debate should then be that, look, we can reduce your taxes, the debate should be that with these taxes that you pay we can give you more value for tax. But the debate should never be that you would never pay tax. Any politician who comes to say that to you is lying to you”, he said.
On the benefits that accrue from tax revenue, the Governor listed such public services as free health programme, free education for poor people, free immunization and so on as well as the money taken out of the State’s Consolidated Revenue Fund to fight Ebola pointing out that all the people who provide the free services, the teachers and the doctors all got paid.
“We don’t get the drugs for free but we give it to citizens for free. They are funded from taxes – books, drugs, repair of classrooms etc. The monies that make it possible to give those free things come from the taxes you pay”, he told the audience.
Thanking the people for their confidence in his administration over the years, Governor Fashola declared, “Today, I think that all of us can hold our very head high. Individually, when we see what has happened in our state, I think inwardly, we can all go back home and say “yes, I am happy I contributed” because your taxes helped to build it.
“So if you are coming from Mile 12, from Ikorodu, into Lagos, and you are driving on that Mile 12 to Ikorodu Road, if you have been paying taxes, you must feel proud that your taxes helped to build that place. If you pass any of the housing estates, and you see that people are living there, or you see people working during construction, and you see manufacturers of cement or paint or iron rod exchanging goods and services, and making an income, you must feel proud that you helped to make that happen”, the Governor said.
He also drew attention to other projects such as the Badagry Expressway Expansion saying the progressive expansion of the six lane high way into a 10 lane high way four rail stations already built as well as the pillars now showing that the rail is heading to Marina, would make every taxpayer feel proud that his tax helped to build that place.
“When the Blue Line finally comes on stream, you must feel proud that on the day you entered the first coach that you helped to build this”, the Governor said recalling that in the beginning when the first Conference was held, he foretold the imminence of a drop in the price of crude oil.
Describing this as old news he said the current news is that due to this development, some states in the country no longer able pay salaries and the Federal Government did not pay its staff in December 2014 adding that although Lagos State is also affected in terms of revenue drop, it was able to pay, not only the salaries but also a 16 percent bonus in December.
“We are all affected, make no mistake about it, we are affected in Lagos because if oil price goes up we get more money from Federal Allocation; but as it comes down, we have seen 25 – 30 percent drop in what we collect from Abuja. It is also affecting our Internally Generated Revenue because a sizeable part of it comes from Value Added Taxes. When income in the larger economy drops you will have fewer exchanges of goods and services and if fewer goods are being moved, there will be fewer goods to be taxed”, he explained.
Governor Fashola, who recalled the recent rendering of his account of stewardship at the 2,300 days of his administration, added that in spite of all the economic vicissitudes its developmental work also continued pointing out that it would have been unimaginable where the State would be if projects such as the Badagry Expressway Expansion, the Rail project, the Mile 12 Ikorodu Road and Imota Asphalt plant were not done.
“The ruling party criticized us then that we were taxing too much but they forgot that the law within which we were administering the tax was enacted by them. They cannot out manoeuvre us; we will always be ahead of them”, the Governor recalled adding that the Minister of Finance was now thinking of raising revenue through taxation.
Governor Fashola quoted from a September 3, 2007 report on the Daily Independent Newspaper report of what the Democratic Peoples Alliance (DPA), (the Party on whose platform Jimi Agbaje ran in 2007), said about taxation suggesting that people should not pay tax until government showed what they were doing with the N6 billion monthly revenue being generated then and the response given by Joe Igbokwe to the fact that the DPA candidate was playing the script of the ruling party.
According to the Governor, the gubernatorial candidate of PDP, Mr. Jimi Agbaje, who contested against him in 2007 as the governorship candidate DPA, has proved right the response of the then Publicity Secretary of the now rested Action Congress (AC), Mr. Joe Igbokwe, who accused the DPA of playing a mercenary role for the PDP to divide the votes of Lagosians and make Lagos vulnerable to the PDP.
The September 5, 2007, Daily Independent report, according to the Governor, quoted Joe Igbokwe as saying, “With the now popular news that its gubernatorial candidate for Lagos is the anointed son of the PDP, no one is left in doubt that a national party that exists only to constitute a nuisance in Lagos has hit the home stretch”.
“They were agents of PDP masquerading as DPA. The masquerade has been revealed today”, the Governor said adding, “After deceiving the people of Lagos, the candidate of the DPA has finally crossed over to the umbrella party, the Peoples Democratic Party (PDP).
Advancing more reasons why Lagosians should not vote for the PDP candidate in Lagos, Governor Fashola also disclosed that the PDP candidate’s Pharmacy in Apapa is currently owing the state government the sum of N1, 629,064.62 being arrears of Land Use Charge for 2009, 2010, 2011 and 2012 adding that in addition to being deceptive the candidate was also a tax evader.
He declared, “This is the man who wants to be your next governor. I leave you to make the choice. But I will advise you to avoid inexperience; I will also advise you that you avoid experiment and I will advise you to avoid deception. Most importantly, I will advise you to avoid a tax evader. Vote for continuity and let us keep Lagos working by keeping our own destiny in our hands”.
Earlier, in her remarks, Chief Judge of Lagos State, Justice Funmilayo Atilade, told the audience that only 600 revenue cases were filed during the year in the whole of Lagos adding that there has been a great improvement and voluntary compliance with payment of taxes.
The Chief Judge who was represented by the Coordinator, Fast track Revenue Collector, Justice Coker, said of 600 cases, most of them were withdrawn on the order of the court on the ground that the defendants had complied”.
While giving reports on issues raised and the action points by the stakeholders, the Special Adviser on Taxation and Revenue, Mr. Abimbola Shodipo, expressed joy that the Lagos Internal Revenue Service has grown in leaps and bounds. He told the audience,