Lagos targets N720bn IGR in 12 months
To successfully drive the implementation of the N1.046 trillion 2018 Lagos’ budget proposal, the state is targeting an approximately N720.123 billion Internally Generated Revenue (IGR), representing about 80 percent of the total revenue expected to accrue to government’s coffers (including federal transfers) in the course of the year.
Of this sum, the Lagos Internal Revenue Service (LIRS) alone is expected to raise N440.121 billion, which is equivalent to 61 percent of the total IGR projection.
To actualise the projections, the state government will be striving to improve revenue-to-GDP ratio from current 2.18 percent level to about 5 percent or more in 2018, by bringing more people into the tax net and promoting improved filing of returns and self-assessments by taxpayers, as well as driving fiscalisation of consumption taxes.
Akinyemi Ashade, commissioner for finance, speaking on these projections, says government expenditure will be largely driven through proceeds from enhanced revenue reform embarked upon by the current administration.
“The Enhanced Revenue Reform (ERF) will focus on fiscalisation of consumption taxes, improved enumeration and collection of land use charges, improved administration of motor vehicle administration laws and expansion of activities of ministry of physical planning and urban development and related land agencies towards ensuring that all trapped revenues are released to the coffers of the state government,” Ashade said.
According to Ashade, the state’s initiatives under the ERF are being supported by relevant enactment and re-enactment of laws and regulations by the House of Assembly.
Ashade, who spoke with journalists on the state’s projections, said that the recent reforms in the LIRS and the opportunities provided by Voluntary Assets and Income Declaration scheme (VAIDS) in conjunction with the Federal Government agencies will result in deepening the tax base and widening tax net from the current five million to eight million people this year.
He said “Our monthly IGR target in 2018 is ₦50bn and we consider this very conservative because our revenue to GDP ratio is still about three percent which means there are huge opportunities for growth under the current reforms for revenue enhancement.
Our fiscal strategy for 2018 will ensure sustainable fiscal balance with appropriate level of public sector borrowing and acceptable aggregate public debt. I will like to reiterate that despite the additional burden arising from devaluation of the Naira, our debt service ratio remains very strong on the back of our impressive revenue performance. The state’s net debt stock of N874.38bn represents about 3 percent of the state GDP, while the debt service charge to revenue ratio stood at 17.61 percent compared to 13.32 percent in 2016 and 12.45 percent in 2015,” Ashade said.
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