Lagos: Govt. recovers N20 billion from tax defaulters

Posted by admin Headlines, Lagos, State News Friday, April 29th, 2011

Poised to eradicate incidents of tax evasion in the state , the Lagos State Government has expanded its drag net, recovering N20 Billion from tax defaulters in the state, even as it took a swipe on the proposed amendment to the personal Income Tax by the National Assembly.

The Special Adviser to the Lagos State Governor, Mr. Adeola Ipaye, who revealed this at a ministerial press briefing in Lagos yesterday said the proposed bill was tailored towards frustrating the state government, noting that it would be nonsensical to pass such a bill.

According to him: “A situation in which the Federal Government currently takes as much as 52 .68 percent of the centrally –collected revenues in the Federation Account, leaving the states and local government with 26.72 and 20.60 percent respectively is unacceptable . “This creates a glaring and unacceptable imbalance in the financial resources of the three tiers of government, which is quite inappropriate at a time most state government are finding it difficult to invest in capital development .”

Ipaye also fingered Inadequate qualified manpower to drive the reform in tax/revenue sector as major reason the Lagos State Government engaged consultants and agents for revenue collection. The Special adviser revealed that the state did not need to maintain permanent staff for auditing of companies operating in Lagos, as auditing was not done daily. Ipaye, responding to lingering allegation that over 25 percent of the taxes and revenue collected in Lagos goes to consulting firms, described it as untrue. He said what was paid as fee to consultants engaged by the government was negotiable and often would not exceed 10 percent.

Ipaye added, however, that there might be a situation where a consultant, who uncovered a sharp practice by companies (which may have been denying government of its rightful income) was given special consideration in terms of percentage of commission. There had been strong criticisms against the Lagos government over the use of consultants in revenue matters. The criticism had been against the backdrop of professionalization of the state revenue board.

The Babatunde Fashola led-administration took the revenue board out of the core service as part of reform process to shore up the revenue profile of the state.

-Sunwp_posts