Press Releases

Fiscal Federalism: Fashola Takes Campaign To JTB

Jul 27, 2008 - Lagos State Governor, Mr. Babatunde Fashola (SAN), Sunday took his campaign for Fiscal federalism to the Joint Tax Board, urging it to formulate a legislation that would regulate the tax system in the country.

Fashola, who spoke at the start of the 119th Meeting of the Joint Tax Board at the Eko Hotels and Suites Victoria Island, Lagos, particularly charged the Board to use the opportunity of the meeting to tell the Federal Government to leave Value Added Tax (VAT), Lotteries and Driver’s licences to the States.

“The Joint Tax Board can rise from this meeting and say once and for all that the Federal Government should leave VAT to the State Governments. The Joint Tax Board can rise to say that the Federal Government should leave lotteries to the States because it is a matter of choice, it is a consumptive tax. Also the Board can tell the Federal Government to leave drivers licences to the States because you cannot centralize driver’s licences for Nigeria”, Fashola charged.

He argued that the fact that the nation’s constitution consisted of carry-overs from the military “where legislative powers had been appropriated with neither consultation nor debate”, did not mean that Nigerians as a people should continue to keep those laws.

“One of the issues I have canvassed in a paper is that we should stop blaming the constitution”, the Governor said and asked. “Is it right for us as a people to continue to say that because it is there, even if we know it is wrong we should continue to keep those laws?”

Pledging that if the JTB should send such legislation to the National Assembly, his administration would be in the league of those who would lobby for its passage into law, Fashola declared, “it is a participatory democracy. Our State is ready to partner along those lines and our commitment is unshaken”.

The Governor also queried the justification in the Federal Government which according to him has engaged in a policy of privatization to continue to demand an increased share of revenue allocation saying it must first give account of the quantum savings it made from the sale of some major public utilities such as NEPA, NITEL, Nigeria Airways, Federal Government quarters etc.

“If the Federal Government demands more revenue, it must justify it, first by explaining that after divesting so much, this is what I have saved but this is my argument for additional revenue”, Fashola argued stressing that it was wrong to strip the governments of revenue if the nation truly intends to fulfill its objectives and aspirations towards achieving the Millennium Development Goals.

Describing the Joint Tax Board as “most important and crucial plat form to discuss issues that challenge our unique Federation”, Fashola stressed the need to harmonize and develop on diversity of the nation adding that the Board was one of the vehicles through which it could be done in the most effective and efficient manner.

“I believe that the Board can serve as a most important pressure group for formulating and articulating policies for tax administration across the country while respecting and recognizing the diversity of the various states and component bodies that form this constituent country”, he said.

He said his administration has placed emphasis on taxation because of its belief in the efficacy of the social contract which requires the government to fulfill its constitutional mandate to the people while they provide the government with the revenue through their tax.

“If people give us a mandate, based on the promises we have made to them, it is important for them to also participate in the execution of the mandate. If their money is there, there hearts and their minds will be in it” the Governor said.

On the issue of alleged multiple taxation in the State, Fashola explained that the constitution authorized each of the three tiers of government to collect tax to fulfill its constitutional responsibilities adding that what the State has done to check multiple taxation was to hold meetings with all the local government representatives to agree on the list of taxes approved for collection adding that the approved list has been sent to the State House of Assembly for legislation and publicity.

Fashola however said that in spite of the modest gains that State Government has made in terms of revenue generation the State was still the poorest in the country adding that the population of the State was on the increase at the rate of one million people who enter Lagos yearly never to return while over 60 per cent of the nation’s industrial activities occur in the State.

“It is only by providing the kind of facilities as you have seen that we are trying to provide that businesses in which most of you hold shares on the Stock Exchange can thrive. It is only by providing healthcare that the human capacities that drive these businesses can remain healthy” he said.

Earlier in her address, the chairman of JTB, and Executive Chairman of the Federal Inland Revenue Service (FIRS) Mrs. Ifueko Omoigui-Okauru commended the Lagos State Government for its effective and efficient mechanism of taxation saying that the State Government stood out in its commitment to build a machinery of tax administration to increase ability to deliver much needed revenue to the State Government Coffers.

“In essence, Lagos State Government has proved to be true what we have always believed that if government gives tax administrators the needed support, tax revenue can grow and overtake revenue from oil”, pointing out that the State has established itself as the first where tax revenue surpasses revenue from Federal Allocation in the country.