How Sokoto, Adamawa, Imo, Others Waste Billions Of Naira Tax Earnings On Purchase Of Vehicles For Officials, Renovation Of Government Houses
Report examines select states personal tax earnings of states and what the states are spending equivalent amounts on.
Areview of budget performance documents of several state governments has shown that several states spent equivalent amounts paid as taxes by employees and business owners on frivolous expenditure.
The report examines select states personal tax earnings of states and what the states are spending equivalent amounts on.
Taxes are a major form of revenue for states in terms of independent revenue.
Sokoto State budgeted to earn N9.5 billion from personal taxes in the whole of 2024.
However equivalent of this money is expected to be spent on purchase of Prado jeeps for state executive council members at N8.690 billion and purchase of thirty vehicles for honorable members and management staff put at N3.1 billion.
Both are earmarked to gulp N11.7 billion, which is more than what the state will earn from personal taxes.
This would mean that after spending equivalent personal tax payers money (N9.5 billion) on purchasing vehicles for political appointees and lawmakers, the state will still need to spend what it plans for instance to earn from withholding tax (N2 billion estimate for 2024 fiscal year).
The situation is not different in Adamawa State where the sum of N3 billion is expected to be earned from Pay as You Earn (PAYE) taxes.
The figures are broken into direct assessment N351 million, Pay as you earn from State government workers N1.366 billion, PAYE from local government staffs N411 million and PAYE from Companies N939.4 million.
Construction of Deputy Governor’s lodge in Abuja is estimated to gulp N1 billion while renovation of deputy governor’s offices in Yola stood at N1.2 billion. In total the deputy governor office alone will take N2.2 billion which is 72.2% equivalent of the total tax earnings projected for the state for 2024.
Imo State personal taxes budget stood at N19 billion, while the state plans to spend N3 billion on vehicles for 27 members of Imo state House of Assembly members while furnishing the Clerk house with N120 million.
It would mean that for every N100 naira earned as tax in 2024, Imo state planned to spend equivalent N16.3 naira to buy vehicles for house of assembly members and furnish the clerk house.
Another state, Kwara, plans to make N13.4 billion from personal taxes. The budget breakdown is highlighted as, Pay as you Earn N11.5 billion and direct assessment N1.9 billion.
In same year, the purchase of vehicles for 24 New Hon. Members, Clerk of the House, Secretary of KWHASC, Purchase of Departmental Vehicles. Purchase of 1 Hilux Van. Purchase of 1Bus Hiace 16 seaters is expected to gulp N300 million.
Another sum of N1 billion is planned to be spent on Presidential lodge, Guest chalets.
Kwara State plans to purchase Toyota Bus (18 seaters) 2021 mode, Toyota Hillux (18 seaters) 2019 model, Prado Jeep 2021 model for 19 Judges, Toyota High lander for CR at the rate of N500 million.
In total, the sum of N1.8 billion is earmarked for vehicles for house of assembly members, judges and for presidential lodge.
Meaning that for every N100 Kwara plans to earn as personal tax, N13.6 naira will be spent in vehicles for house of assembly members, judges and presidential lodge.
The development does not just stop at budgeting alone. In Cross Rivers state, a total of N3 billion was earned from personal taxes and direct assessment tax in the first six months of 2024. They are broken into Personal taxes (PAYE) N2.4 billion, Direct Assessment N105.2 million Cross Rivers State Government PAYE N506.1 million.
In same period of time, the governor’s lodge was renovated with N500 million while renovation of government offices took N1.1 billion.
In total renovation stood at N1.6 billion, representing equivalent 53% of what was earned in the state in same period as personal taxes and direct assessment tax.
While Ekiti made N5 billion in the first six months of 2024 from personal taxes (PAYE, Direct Assessment) it paid N1.451 billion for 40 GAC SUVs for political office holders and another N314 million for furniture purchase, totaling N1.7 billion.
This would mean that N34 naira of every N100 it earned from personal taxes were spent on buying 40 GAC SUV vehicles and furniture purchases.
These expenditure on renovations, vehicles for government personalities and appointees come amid developmental challenges facing states in Nigeria especially in the area of revenue generation.
For instance, many states in Nigeria are highly indebted due to reliance on loans as a source of meeting their fiscal demands.
Issues such as poor road networks, dearth in basic facilities such as water, access to healthcare bedevil states, some of which are the essentials that taxes should help cover.
Other issues that affect states are bothering on payment of salaries, however, these have not stopped many states from spending billions on purchasing vehicles for political office holders time to time, it has not also stopped jamboree on different form of renovations.
Already, there have been concerns over prudence of states in management of their scarce resource with the people at the Centre of being affected of impact of the stated poor management of resources.
