World Bank urges states to strengthen revenue

The World bank group on Tuesday said that states need to increase in fiscal transparency and accountability in order to boost their non-oil revenues, efficiency and strengthen debt sustainability. The Task Team Leader, World Bank, Yue Lee said this while presenting a paper at the ongoing 2018 Conference of the National Council on Finance and Economic Development (NACOFED) in Kaduna state.

The paper which was titled “strengthening states’ revenue performance through transparency and open government” shows how states have been facing serious fiscal pressures in revenue generation, expenditure and debt since 2015. She cautioned that in order to improve transparency and accountability, states need to be able to publish her budgets and financial statement and timely implementation of budget report.

She pointed that many states despite having very low Internally Generated Revenue (IGR) base to grow from, they have already demonstrated the possibility to significantly increase revenue base without introducing new taxes or raising existing taxes. For instance, Lee said in 2016 year of recession, Kwara state was able to grow its IGR by 140 per cent; Kano state grew its IGR by 127 per cent; Ogun state grew its IGR by 111 Per cent amongst others.

She said “This is incredible in a year of recession, these States were able to grow their revenues by more than 30 per cent. I can tell you now, you are not going to get that growth in VAT, corporate tax, custom revenues.” She reiterated that the transparency and accountability of state revenue is currently weak adding that the inability of states to track, monitor and report IGR collection are contributing factors. Lee said that tax compliance is very low in Nigeria due to weak enforcement and low tax morale which in turn affects the revenue impact.

On reasons why tax morale is low, She said according to a survey from NESG in 2018, people relatively receive little information about the tax they paying; their day to day experience of tax is bad; they feel they don’t get anything from paying their tax; they do not trust the government. She said that the states needed to bridge the gap by providing better health and educational facilities for its citizens amongst others.