Enugu State’s Internal Revenue Service (ESIRS) has announced a significant financial milestone, with the state generating an impressive N35.9 billion in revenue within the first seven months of 2024.
This achievement not only surpasses the entire revenue generated in 2023, which stood at N33.9 billion but also underscores the effectiveness of the strategies implemented under Governor Peter Mbah’s administration.
During a program marking his first anniversary in office, the Executive Chairman of ESIRS, Emmanuel Nnamani, credited the state’s remarkable revenue growth to the strategic reforms introduced by Governor Mbah. According to him, these reforms, aimed at boosting revenue collection and closing loopholes, have had a tangible impact on the state’s financial health.
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Nnamani highlighted that the revenue was generated from a diverse range of sources, including e-ticket sales, Pay-As-You-Earn (PAYE) taxes, land use charges, withholding taxes, capital gains taxes, and consumption taxes. He disclosed that the state’s average monthly revenue collection now stands at N5 billion, a significant improvement over previous years.
“We can say that in seven months of 2024, the state has recorded N35.9 billion in Internally Generated Revenue (IGR), compared with N33.9 billion recorded for the whole of 2023.
“This gives us an average collection of N5 billion every month,” he said.
One of the key initiatives driving this growth is the introduction of e-ticketing for tax collection in the informal sector. This new system has enabled the government to capture taxes from previously untapped sources, including markets, transporters, and artisans. Describing e-ticketing as a “disruptive” approach, Nnamani noted that it has helped redirect taxes from non-state actors to the government’s coffers.
In the first seven months of 2024 alone, the state recorded over N2.3 billion in revenue from the informal sector. This represents a significant achievement, given that these taxes were previously not fully accounted for.
“We also discovered that in the core area of taxes like Pay As You Earn Tax, Withholding taxes on individuals, only few companies remit these taxes to Enugu government,” he said.
Digitalization and Expansion of Tax Collection
Another critical factor in the state’s revenue success is the digitalization of tax collection processes. The government has expanded its payment gateway options to include platforms like Inter-Switch, Remita, E-transact, and Monie Point, making it easier for taxpayers to meet their obligations. This modernization effort has contributed to the steady rise in tax revenues.
Nnamani also mentioned the activation of dormant taxes, such as the Capital Gains Tax and Purchase Tax, which have further bolstered the state’s internally generated revenue. The Purchase Tax, which applies to hotels, support services, and the sale of goods like beer, cigarettes, and cars, had not been fully utilized in the past but is now actively contributing to the state’s revenue.
“We equally activated the purchase tax which had not been activated for collection. They are majorly on hotels and other support services in the state like sales of beer, cigarettes, cars and others,” he said.
The state has also made strides in improving the collection of Land Use Charges through the activation of a Geographic Information System (GIS). This system has revealed that there are over 290,000 properties within Enugu Metropolis and surrounding areas. The government is now focused on ensuring that every property owner in the state pays their fair share of land use charges.
Despite these commendable efforts and results, the revenue generated still falls short of what is required to meet the developmental needs of the state. This shortfall has been attributed to the broader economic challenges facing the Southeast region, particularly the lack of industrialization.
The Southeast, which includes Enugu, consistently ranks among the lowest regions in Nigeria for attracting foreign capital investments.
Economic experts have pointed out that the region’s overreliance on certain sectors, particularly the hospitality industry, limits its economic growth potential. While the proliferation of hotels and related businesses has contributed to the economy, it is not sufficient to drive the kind of robust growth needed to address the region’s developmental challenges, they said.