Every State has the potential to be self-sufficient if only the state can harness her potentials adequately. The reduction in global oil prices and volume demands has now made diversification of the Nigerian economy from over-dependence on oil a mandatory policy issue. Oil revenue dependence has essentially made both the federal and state governments to seek for other viable sources of raising fund.

Most states of the federation depend solely on federal allocation from FAAC to fund their capital and recurrent expenditures including payment of workers salaries. Predictably, the oil revenue has continued to decline at the international market due to technological innovations that seek to eliminate consumption of oil products. The total revenue accruable to the nation from sale of oil is determined by the price and quantity sold at the international crude oil market. It also will determine what is available to be shared among all tiers of government which has been on a continuous decline

The product life cycle of oil has reached its climax and may not recover from its decline. It may eventually go into extinction just like coal, which used to be one of the major sources of income for the country. The reality at hand for the three ties of government is to wake up to generate revenue internally within their tax legislative jurisdiction. This will help to meet up with the expectation of the recurrent expenditures in the short run. Many states are yet to show political will and financial support to their revenue collection machineries while some states ran into the current financial crunch due to their lack of fiscal prudence.

Government is all about stewardship, accountability and transparency. The wealth of the state belongs to the people and they will be more than willing to entrust more to the leaders when value is given to them. Public office managers must eliminate wastages, avoid unneccesary expenditure and corruption.

 Issues about state IGR borders on the political will, resilience and commitment to grow revenue. Many state governments look forward to Federal Account Allocation Committee (FAAC) to deliver services to the people. When such is not forthcoming in proportion to funding requirements hence they fail. People must pay for public services through taxes, levies and fines as well as take ownership of public infrastructure and protect it because it is their collective wealth and should hold leaders accountable.

The cost of running a state is enormous especially in payment of workers salaries and other recurrent expenditures. This is in addition to meeting the cost of developing infrastructure such as roads, electricity, health, Schools etc. Prudent management of limited financial resources of the state will go a long way in meeting the needs of the people through proper accountability on budget management. Some of the reasons why most states financial crisis includes over-trading, fiscal and budgetary indiscipline, dwindling revenue allocation from FAAC and poor internally generated revenue (IGR). The call for a vibrant revenue collection system cannot be over-emphasized, while the extravagant cost of governance must be avoided by the leaders. Taxation is the singular renewable source of funding, therefore expenditure needs to be targeted on developmental projects, infrastructures, manpower capacity development which can enhance gross domestic product (GDP). That way citizens earning and taxable capacity can be guaranteed. 

In most developed societies, government capital and recurrent expenditures are financed by revenue generated from taxpayers, given the level of development in Nigeria, private public participation in revenue cycle management is inevitable and should be encouraged. This will not only eliminate corruption but enhance development.

Furthermore, each state government must show good governance by way of service delivery that will improve welfare of taxpayers. Public enlightenment on statutory obligations goes beyond the “PAY YOUR TAX” jingle, but must reflect on government specific and impactful interventions in education, health, security, power and enabling business environment. This will justify the citizens to pay tax and make them to pay more.

States can increase their IGR by paying attention to ensuring checks and balances, promoting public private partnership, eliminate revenue leakages, show strong political will in handling the issues of revenue drive, create job opportunities and attract meaningful investments as well as provide adequate control on fiscal transparency and employment of relevant information technology tools in revenue collection.

Internally generated revenue remains the only panacea to infrastructural development and funding public services. As oil revenue is dwindling, states can use effective and innovative revenue management skill to increase their IGR to the point of adequately funding both capital and recurrent expenditures from taxes, levies and fines generated internally within the economy. State should compile integrated database of her citizens income and expenditures that will help make eliminate tax evasion difficult. They should effectively use the legal framework on taxes and levies that will tackle the issue of tax multiplicities. The states population index can offer hope for investors, which will positively boost the potentials for IGR realization. 


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