With Tax Automation, Lagos won’t need Federal Allocation any more, Ambode boasts

Lagos State Governor, Akinwunmi Ambode has said that with the abolition of cash payment in tax remittance and adoption of automated tax system, due to the high level of under-payment and non-remittance by stakeholders, the State is on the brink of not depending on Federal allocations any longer.

Ambode at a stakeholders meeting held at the State House in Abuja, expressed disappointment at the level of tax under-payment and non-remittance by owners of hotels, restaurants, bars and event centres.

He lamented that hotels, eateries and restaurants in the state have not been remitting consumption tax collected into the state government coffers duly, thereby causing revenue loss for the state government. But with the introduction of the automation system, all the headaches will be a thing of the past and it will be a win-win situation for all parties.

“As progressive partners in the development of our dear state, we solicit for your co-operation and support at actualising this noble initiative.

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“All hoteliers, event centre proprietors, restaurant and bar owners must allow the integration of their systems along with the Lagos State Internal Revenue Service (LIRS) server to facilitate the monitoring of consumption tax transactions and remittance of same to the state.

“We must be alive to our responsibilities by paying taxes due in order to ensure the development of our dear state,” the governor explained.

He explained that the rationale behind the automation of tax system “is to rely less on federal funding and more on self-funding. The automation of processes and leveraging on technology are key to the development of any country and that is what the fiscalisation project has come to address”.

“Nigeria has moved from its current position on ease of doing business index from 169 to 145, which is encouraging. This is partly attributable to the reforms and processes put in place by the state”.

He said despite the harsh economy, the 2017 budget of the State performed at 82 per cent with N503.7billion total generated revenue representing 78 per cent performance, while total recurrent expenditure stood at N281.33billion representing 72 per cent and N387.60billion capital expenditure representing 76 per cent performance.

Ambode said it was important for all stakeholders “to play their part in scaling up taxation being one of the ways governments is able to fund its activities and implement projects and policies for the overall benefit of the people.

Some of the associations that spoke at the meeting, Lagos Hoteliers Association and Association of Fast Food Confectioners of Nigeria, AFFCON, stressed that harmonisation of both the Value Added Tax (VAT) and the consumption tax would reduce burden on consumers.

Speaking on behalf of the stakeholders, President of hoteliers in Lagos, Prince Adekunle Akilo, said: “The law should be fair to the stakeholders. We believe that after paying 5 per cent of VAT, you are asking us to pay another 5 percent consumption tax. It is double taxation. It is apparently complicating and duplication of the law.
“It is good that you want to collect consumption tax but the state should have liaised with the federal government to exclude Lagos from states paying VAT. With this, the state will only collect consumption tax and pay the federal government certain per cent from it.”

By Akin Obakeye

 

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