The National Economic Council (NEC) says states are owing the Federal Inland Revenue Service (FIRS) N41 billion in Value Added Tax (VAT).
Governor Badaru Abubakar of Jigawa State, disclosed this while briefing State House Correspondents shortly after NEC meeting presided over by the acting President Yemi Osinbajo, on Thursday in Abuja.
He said that the council was hopeful that the indebted states would pay up, adding that there was an improvement in tax remission from states in comparison with that of last year.
“We had briefing from the chairman of the FIRS and it dwelt on two aspects of tax issues; one is on the Value Added Tax (VAT) that is being collected by states.
“He informed the states what their positions are and the outstanding due to the states of about N41billion.
“He believes the states have to pay; he came up also with new technique and system that will help automatic collection of taxes–both VAT and withholding tax; I think the states take and are willing to pay their outstanding.
“This is very important; when we are talking of zero oil, taxes become very important in the future prospects of this country.
“So far, he mentioned that from January to date, about N40 billion was remitted from the states, which has a significant increase compared to the what happened last year,’’ he said.
He said that the governors and the finance commissioners were fully notified on how to boost revenue.
Badaru said that audit was going on in many states on how to reconcile figures between what the states had and what the FIRS had.
According to him, with the initiative, automatically tax will be transmitted to FIRS from the states without delay and without many problems.
The Jigawa state governor said that the second issue discussed was on the capacity of Micro, Small and Medium Enterprises (SMEs) to support the economy of the country.
“MSMEs contribution to the Gross Domestic Product (GDP) was discussed and as well as their contributions to exports and tax collection.
“This is all in the view of expanding our tax base and revenue generation towards zero oil economy.
“Challenges such as how the governors have to contribute to make MSMEs more active, responsive and more organised so as to pay their taxes and perform well have been discussed.
“The states promised to support the Federal Government because most of the taxes are also coming into the states.’’
He said that from the statistics made available by the National Bureau of Statistics (NBS), in partnership with Small and Medium Enterprises (SMEs) group, there were about 37 million MSMEs making significant contribution to GDP.
Badaru said that if MSMEs were harnessed, they would help the economy greatly and also boost revenue.
He said that NEC was of the view that organs of government saddled with the disbursement and utiltisation of tax revenue should be transparent and accountable in order to motivate voluntary tax compliance by the MSMEs.
According to him, government at all levels have agreed to provide infrastructure facilities and enabling business environment to allow MSMEs to thrive.