Business/Economy

Don advises state govts to incorporate informal sector to boost IGR

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29 May 2020 9:01 AM GMT
Don advises state govts to incorporate informal sector to boost IGR
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A don at the Pan Atlantic University, Dr Bright Erega, has called on more states to incorporate the informal sector into the tax net to boost their Internally Generated Revenue (IGR). Erega told Supreme magazine on Friday that it had become worrisome that the total IGR of all states in the country was a paltry N1.3 […]

A don at the Pan Atlantic University, Dr Bright Erega, has called on more states to incorporate the informal sector into the tax net to boost their Internally Generated Revenue (IGR).

Erega told Supreme magazine on Friday that it had become worrisome that the total IGR of all states in the country was a paltry N1.3 trillion.

He added that states should intensify their diversification drive through taxing the informal sector of the various states’ economy.

“The states should group the informal sector into associations so as to make for easy taxation to shore up revenue; as enforcing this fiscal approaches will augment their revenue,’’ he said.

Erega said that state governments should continue to enhance their business environment in order to attract investors.

According to him, most states’ IGR are shrinking because of the dearth of middle class.

“The dearth of middle class in most states is responsible for low taxes, leaving only two other classes.

“While the upper class in the country likes to evade taxes, the lower class is becoming too weak to be taxed,’’ Erega said.

Supreme reports that the National Bureau of Statistics (NBS) revealed that the 36 states and Federal Capital Territory generated a sum of N1.33 trillion in 2019, a 14.1 per cent increase compared to N1.17 trillion generated in 2018.

According to the report, 83.4 per cent (N1.11 trillion) of the revenue generated was in form of taxes, while 16.6 per cent (221.56 billion) was from Ministries, Departments and Agencies (MDAs) revenue.

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