Osinbajo: Prolonged Recession Would Have Been Disastrous for Nigeria

Says high networth Nigerians, firms voluntarily paying income, assets taxes

The Vice President, Prof. Yemi Osinbajo, yesterday stated that Nigeria’s emergence from the economic recession was timely, and that it could have been disastrous if she didn’t get out of it now.

Osinbajo also stated that rich Nigerians and top companies who hitherto were not paying to the government commensurate tax returns on their assets and incomes were now strongly responding to its Voluntary Assets and Income Declaration Scheme (VAIDS).

Speaking when he declared open a two-day national workshop on alternative sources of revenue for sustainable development, organised by the Revenue Mobilisation and Fiscal Allocation Commission (RMFAC) in Abuja, the vice president explained that the government had within the period of the country’s economic recession, built fiscal foundations that would ensure an accelerated economic growth for the country going forward.

Osinbajo was represented by the Minister of Finance, Mrs. Kemi Adeosun, at the meeting where he also called on states and local governments in the country to imbibe accountable revenue collection and management processes to engender improved tax revenue collection from within their territories.

“This economy has shown resilience to ensure that the recession we entered into wasn’t a prolonged one, and we thank the Nigerian people for ensuring it wasn’t a prolonged recession which would have been very disastrous for us,” he said.

The vice president further explained: “Now, we have built the foundation for growth and we expect now there will be rapid development, accelerating the pace of reforms at all levels.”

“We are determined to build an economy that works for all Nigerians and not just for the rich, not just for when oil prices are high, but for everybody for the long term. This commitment is critical and the engine for this commitment is the state and local governments.

“For this economy to grow in the way that it is intended, every states, every local governments must be fiscally sustainable, must be able to meet its obligations and I am afraid at this point that the obligations of states and local governments is not just the payment of salaries, they have critical roles in development,” the vice president added.

He said the federal government has in partnership with the states, laid key foundations that would support future economic growth across the states, and listed these to include, budget implementation facilities; refund of the Paris Club over deductions; as well as a 22-point fiscal sustainability plans which according to him, all the states governments signed on to.

According to him: “Those who embraced the change (22-point fiscal reform) have done better than others who didn’t and I want to encourage those who have not, to quickly do that before it becomes too late.”

Speaking on the government’s efforts with the VAIDS so far, Osinbajo stated: “People were not paying taxes because they feel they don’t have to, and because there are no consequences for not paying, but now we are correcting that.

“We now have the data, information and capacity to access people correctly and to get them to pay taxes. The Voluntary Asset and Income Declaration is going on very well and we are getting a very strong response from high networth individuals and companies, as well as lower income earner who simply want to do the right things and who support what this government is doing.”

He also spoke on the poor tax revenue base of the states, saying: “One of the biggest ingredients for revenue generation is accountability. People will support government when they can see what is happening to the monies. Being open, accountable, holding town hall meetings, these are the biggest ingredients.”

In his opening remarks, the Acting Chairman of RMFAC, Shettima Abba-Gana, stated that the workshop was aimed at helping states identify alternative sources of revenue from solid minerals, taxations, agriculture, public private partnerships (PPPs), tourism, and cost-efficient governance.

Abba-Gana, noted that the drastic reduction in revenues of states and its subsequent impact on their developmental plans necessitated the workshop, in order to point the states to the untapped revenue sources within them.