Is it true that only 600,000 Lagos residents pay tax?

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The Claim

The Lagos state Governor, Akinwunmi Ambode has stated that less than 600,000 people pay tax in Lagos state.

According to the governor, “The number of people paying taxes in Lagos is less than 600,000 people and we are 22 million…”.

He added that unpaid taxes limit the government’s ability to invest in infrastructure and deal with other challenges facing the state. In his words, as reported, “What I am saying is that there must be a convergence between civic obligations and the ability of government to build trust and be able to tell people that you know what, the little that you are giving me, I will use it judiciously”.

 

Is the governor correct that less than 600,000 people pay taxes in Lagos?

This question is the subject of this factcheck.

 

The Facts

We looked at some newspaper reports quoting the Lagos state Commissioner for Economic and Budget Planning, Akinyemi Ashade. Ashade stated in 2016 that 420,000 residents were captured in the tax net, increasing the number from 4.6 million in 2015 to over 5 million in 2016.

Culled from New Telegraph Online

Other newspapers also reported the Commissioner’s account that Lagos state had over 5 million tax payers in 2016 and was projecting that “an estimated 10 million tax payers would be hit by 2018” .  

Furthermore, the Lagos State Internal Revenue Service put the total number of taxpayers in the state at 4,902,386 in its 2016 Tax Statistics publication.

The governor’s statement generated an interesting debate: some questioned if the governor meant the number of people compliant with Pay As You Earn (PAYE) only, or the number of natural persons paying all taxes to the state as opposed to all taxpayers which comprises human beings and corporate taxpayers. The report below by the Executive Chairman of Lagos state Internal Revenue Service (LIRS) was a useful pointer to the applicable fact.

 

On August 2016, the Executive Chairman of Lagos state Internal Revenue Service (LIRS), Olufolarin Ogunsanwo, stated that only five million people are tax compliant in Lagos state. This claim by the LIRS Chairman coincides with the statement by the Lagos State Commissioner for Economic and Budget Planning, and is an approximation of the number of taxpayers reported by LIRS in the 2016 Tax Statistics publication.

Culled from Vanguard Newspaper

 

Conclusion

Given that the LIRS is the “major revenue generating Agency of the Lagos State Government saddled with the responsibility of collecting taxes”, we will rely on their reports as the fact on this case.

Therefore, the claim by Lagos State’s Governor Akinwunmi Ambode  that “the number of people paying taxes in Lagos is less than 600,000” is false.

 

 


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