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TINUBU’S TAX REFORMS AND LESSONS THAT CAN BE LEARNED FROM ATIKU’S STEWARDSHIP
By Kunle Oshobi.
In the run-up to the 2023 presidential elections, owing to a lack of real tangible achievements as the governor of Lagos state for eight years, the Bola Tinubu campaign team harped on how he increased the Internally Generated Revenue (IGR) of Lagos state during his administration as a major selling point for his lacklustre campaign. While increasing the IGR of the state is not exactly an achievement especially as the people of the state did not feel the benefits of the increased revenue, it is still necessary to set the records straight about who or what was responsible for the increased IGR in the state.
The claims were made that he increased the Internally Generated Revenue (IGR) of Lagos State from N600 million monthly in 1999 when he became governor to N6 billion monthly by the end of his tenure in 2007. While it’s true that the IGR did increase, the IGR in 1999 was N1 billion a month contrary to the claims of Chief Tinubu and his spin doctors while the increase in IGR had little to do with his efforts. Rather Lagos state being the commercial nerve center of the country was benefiting from the rapid economic growth being enjoyed under the Obasanjo/Atiku-led PDP administration of the time in which Atiku was firmly in charge of the economy.
The point to note is that over 70% of IGR in Lagos state is generated from the income tax of workers resident in the state and it was the increased employment rate in the state based on the economic policies of the Atiku-led economic team that was directly responsible for the increase in IGR and not due to any particular effort of the Tinubu administration.
At the return to democracy in 1999, the economy with a GDP growth rate of just 0.58%, GDP of $59 billion, and per capita income of $450 was left in ruins after several years of military misrule. Fixing the economy became a top priority of the Obasanjo administration and with Atiku in charge of the economy, the administration embarked on an elaborate economic reform program that brought about the Telecoms revolution, banking reforms, pension reforms, backward integration program, local content policy in the oil industry and numerous other policies that stimulated economic growth and saw our economic growth rate peaking at 15.3% in 2002. This remains the highest economic growth rate achieved in Nigeria’s history and the Atiku-led economic management team was able to achieve this at a time of relatively low oil prices.
With the phenomenal economic growth enjoyed during their administration came millions of jobs that were created across the country and Lagos being the commercial capital of the country became the chief beneficiary of the jobs created, especially as all the banks, pension companies, insurance companies, oil companies, telecoms companies, and manufacturing companies that increased their staff strengths as a result of the growth had their headquarters and most of their staff in Lagos.
It was this rapid growth in job creation of which the organized private sector in Lagos state was the main beneficiary that was directly responsible for the increase in IGR of Lagos state as this led to a corresponding increase in income tax being paid by workers in the state. The point to note is that the Atiku-led economic team was directly responsible for implementing the economic policies that brought about this job growth. Lagos State just happened to be the chief beneficiary of the economic growth policies of their administration.
Those who understand how the economy works and how tax revenues are generated, find it laughable when President Tinubu’s spin doctors make frivolous claims about how he supposedly increased the IGR of Lagos state but today the joke is actually on Nigerians because the man now believes his own hype and it is based on the illusion that he increased the IGR of Lagos state that he has now presented a Tax Reforms Bill aimed at increasing the tax revenues of the government.
Had President Tinubu properly understood what was responsible for the increase in the IGR of Lagos state, perhaps he would have focused on growing the wealth of the country to increase tax revenues as happened when Atiku led the economic team instead of overburdening an already impoverished populace with more taxes as a means of generating more revenue.
To create wealth in the country, perhaps he should borrow a leaf from Atiku’s $10 billion economic stimulus plan which was targeted at providing funding for millions of SMEs across the country while creating millions of jobs for Nigerians. From this economic stimulation, the government will then be able to generate more taxes from the increased economic activities and jobs created resulting in a win-win situation for Nigerians and the government.
As Nigerians continue to grapple with economic hardship caused by the rudderless economic policies of the Tinubu administration, it’s not too late to borrow a leaf from Atiku’s stewardship as chairman of the National Economic Council where he focused on creating wealth to fix our economic problems and as a result of this wealth creation, not only were majority of Nigerians better off, the government was able to generate a lot more in form of tax revenues without any additional burden on the people.
By kunle oshobi.
SB E-news
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Efficiency magazine
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