Speeches

0ne-Day Meeting With Professional Groups In Lagos State On Tax Compliance

Apr 17, 2008 - Distinguished Ladies and Gentlemen, I see this as a unique opportunity for interaction on issues of mutual concern. If there are any groups in Lagos State with which we, as officials of government, should be speaking the same language, I think they are all here in this room. Apart from the extra comfort I get from seeing my learned colleagues in the Legal Profession here, I note the presence of other critical professional groups – the Engineers, the Accountants, Estate Surveyors, Medical Practitioners, Architects, and the many business and industrial groups. It is my pleasure to welcome you all to this meeting.

My speech will be limited in content. With you, I believe I do not have to tarry on the rostrum, preaching strenuously the gospel of tax compliance and social development. You all know for certain that the enviable heights achieved by developed countries and cities around the world are due primarily to the financial contributions of their residents and visitors.

Taxes on incomes, sales, consumption, properties and several other charges beside, are standard fare in every developed country. Without these, a government simply cannot deliver on its mandate. Rather, it will have to look on helplessly as public health, education, security and other social services deteriorate.

Without a steady source of funding for maintenance, even existing infrastructures will decay and collapse. As tax resistance inch upwards, standards of living will dive downwards. Eventually and surely, the affected government will lose the reason for being. This explains the obvious correlation between the efficacy of a country’s tax regime and the standard of living the government is able to entrench. In short, the appropriate aphorism is ‘no contribution no enjoyment.’

Now there are two sides to the process of building an efficient tax system. Government has a role to play, no doubt; but the citizens have an even greater one. While Government’s role is to set up, apply and enforce the rules and processes, we all know that no society thrives on coercion. That is why voluntary compliance on the part of the taxpayers is so crucial. Every one of us must see the payment of tax not only as a legal and social obligation but also as a contribution to our personal welfare. As much as we tend to make our own arrangements in Nigeria, we cannot build the roads our family would go on or construct schools and hospitals for personal use. If there are no good schools, no good hospitals, no good roads, no employment opportunities and our environment is clogged with refuse and junk, no one is immuned or secured. Even the elite estate dwellers have left the comfort of their estate and come out to the real world now and then.

I even say, without any fear of contradiction, that it is more in the interest of the elite to take tax payment more seriously. Unless we feel able to abandon it altogether, we must contribute enough to help the entire society. To whom much is given, much is expected. History has shown that societies are never static for long. They are either soaring upwards or sinking downwards. In times of normalcy and sanity, the direction of growth depends entirely on the elite. Once things collapse, the poorest and most brutish will surely hold us all to ransom.

By various international assessments, Lagos has already attained the status of a mega city. With an estimated population in excess of 18 million, we have for many years now qualified for the extraordinary maintenance, renewal and social re-engineering efforts which cities in that category deserve. Over 75% of the population lives in Metropolitan Lagos, making it the largest urban agglomeration of black people in Africa and the world.

Since the pre-independence era, access to the ports and the historical significance of Lagos as the capital city of Nigeria has made our State one of the foremost centres of trade and commerce in Africa. Even now that the federal capital city is elsewhere, Lagos still boasts over 60% of Nigeria’s industries, goods import and immigration. As professionals, we all cherish the attendant boom and business opportunities. But these attributes also put us at the centre a growing environmental threat. It has brought about a massive and sustained influx of Nigerians and foreigners from far and wide. With the collapse of Nigeria Railways, an unprecedented pressure is placed on our roads, bridges and other infrastructure by an incessant flow of heavy duty vehicles going to all parts of Nigeria. This also hinders traffic flow, causing stress, pollution and loss of man hours.

To survive as a city State, it has become pretty obvious that Lagos must cope with mega tonnes of refuse generated daily, an alarming concentration of motor vehicles and a rapidly growing demand for potable water, qualitative health and education, extension and rehabilitation of its road network, beautification of its environment and several other social amenities that will make life worth living for its teeming population.

As stated during our electioneering campaigns, the focal point of this administration is to manage these problems and make Lagos a model city where things work. We also promised to make Lagos a choice destination for investors and tourists. Pursuant to our party’s 10- point agenda, the State Economic Empowerment and Development Strategy, and the Millennium Development Goals, we have seriously embarked on:
• A massive rehabilitation or reconstruction of various roads within the metropolis;
• The establishment of a special fund for security, including a special scheme of assistance for police personnel in the Rapid Response Squad for effective crime prevention and detection;
• Procurement of a power plant to ensure steady supply of water from the Iju Water Works and the commissioning of micro water works in several parts of the State;
• Reconstruction and rehabilitation of public schools, including libraries and laboratories;
• Upgrade and extension of health facilities across the State;
• Efficient waste management and maintenance of drainage channels across the State; and
• Aesthetic landscaping, greening and beautification of the environment as well as a strict enforcement of the Lagos masterplan.

You will agree with me that all these projects require huge funding, the primary source of which is taxation. Only when you and I make our little contributions can Government amass the required quantity of income to do what it has to do for the welfare of the people. There is really no alternative to taxation. Government cannot raise money by any other means, especially as it cannot do business as a means of survival. Lagos has far outgrown what it gets from petroleum resources and other federally allocated funds. In fact, these allocations hardly cover our civil service personnel costs. Even if we resort to borrowing, the Banks will soon stop extending facilities to us unless we show a virile and productive tax and revenue system through which we can service the repayment.

For these reasons, we cannot but continue in our drive to have a sustainable and improved Internally Generated Revenue which is the cornerstone of Lagos that works. Every citizen is constitutionally bound to pay tax and more importantly it is our moral duty to do so. We are committed to assist you in this process by putting in place an efficient and effective mechanism for revenue collection. If you have suggestions to make it even more efficient, please bring them forward. I assure you of our maximum cooperation.

This brings me to a critical discussion on our unique responsibility as role models in the society. It is not just our children, but all children from all social strata that want to be like us. They want to be lawyers, engineers, accountants, architects, scientists, administrators, businessmen, etc. I think one thing they must be able to pick up from us is a culture of tax compliance. Every one of our professional rules of ethics stresses the need to be law abiding, to discharge faithfully our duties to society. How can we pretend to be in compliance when we have not even paid our taxes?

As a government, we have presented to the people our cardinal programmes. For now it is unanimously accepted that these are necessary things to do. We have also found that taxation is the master key to the funding of these programmes. We will therefore enforce all the laws that relate to tax compliance very seriously. Criminal sanctions, which have been largely ignored in the past, will be revived with much vigour. By the end of March of every year, we are all expected to have paid our income taxes for the previous year. I sincerely hope no professional will be caught napping this time.

In the same vein, we have strongly resolved that transacting business with our Governments at all levels will henceforth be contingent on the presentation of evidence of tax payments for the past three years. Apart from exposure to the risk of prosecution, taxes unpaid when they are due will be a heavy burden carried over to the next following year, since we no longer waive interests and penalties stipulated by law. This is more so when, as employers, we are expected to deduct and remit our employees’ taxes to government. Please let us put in place systems that will make this process work. Only then are we the true leaders of our professions. I expect the associations to be active in this regard.

No professional should be in good standing when he is in default of tax. After all, once apprehended and prosecuted for tax evasion, such a person can only bring his profession into disrepute.

I am aware of complaints about illegal and multiple taxation. Ours is a sensitive Government that believes in the rule of law. Imposition of illegal taxes has never been and will never be part of our revenue drive. We have been working with the Local Government officials and State House of Assembly with the aim of harmonizing the local levies, removing ambiguities and regulating the collection process so that corporate organizations and residents of the local government areas will know what their obligations are and make necessary provisions towards payment. Furthermore, we have recently set up a public complaints and advisory unit in the Governor’s Office to address all your concerns and give you necessary information on tax payment problems and processes. I hope you will make the best use of these advantages.

In conclusion, I want to say, once again, that the future of our dear State lies in our hands, individually and collectively. Fortunately, when we are able to implement our developmental programmes the professionals are the first to benefit. I urge you all to give something back by paying your taxes. It is our promise as a government that every kobo collected will be judiciously applied and accounted for. I also call on you and other members of the professional groups to be our eyes and ears in our project sites close to your residences or offices. Where you think any project is not being implemented in a professional manner, please let us know. I assure you that we shall take prompt action to rectify the situation.

Distinguished colleagues, ladies and gentlemen, I seek your cooperation in making Lagos the state of first choice and centre of excellence.

“Eko o ni baje o!”

Babatunde Raji Fashola (SAN)
Governor of Lagos State