October 06, 2016
How Senate Frustrated Special Status For Lagos
The bill, if passed into law, will ensure that Lagos is legally entitled to one per cent of the revenue generated by the Federal Government.
The bill, which was presented in the 7th Senate, is sponsored by the lawmaker representing Lagos Central Senatorial District, Senator Oluremi Tinubu, and it seeks to establish “an Act to make provisions for federal grants to Lagos in recognition of its strategic socio-economic significance and other connected purposes.”
Leading the debate when the bill got to the second reading on Wednesday, Tinubu said Lagos, being the commercial nerve centre of Nigeria, served as the commercial capital of country.
She added that the strategic importance of the state was inherent in several sectors of the economy.
The senator added, “Available statistics indicate that six out of 10 international passengers arrive in Lagos while eight out of 10 depart from Lagos. This shows that Lagos is the window through which visitors travel in and out of Nigeria.
“Lagos is home to the major ports that serve Nigeria. It accounts for over 90 per cent of all maritime exports. The state delivers much of the funds and charges that go into the coffers of the Federal Government. It is incontrovertible that Lagos State generates much of Nigeria’s income outside its (the country’s) oil sector.
“According to an FIRS report in 2008, 86.2 percent of companies income taxes were collected in Lagos alone, while 56.7 percent of Value Added Tax was collected in Lagos."
She stated, “It is inadvertent that Lagos has been left to deal with this pressure on its own at huge costs. The state bears the burden for the wear and tear that many of the federal revenue generating activities cause. Irrespective of its contributions to the economy, Lagos receives statutory allocations like other states, which often translate into meagre sums when compared with other states.”
According to Tinubu, the bill aims to remedy the problems faced by residents and visitors in Lagos.
Senator Aliyu Wamakko (Sokoto North), however, faulted the timing of the bill, saying Lagos should not ask for additional funding at a time the country was facing an economic downturn.
He also said the bill, if passed, would inspire other states to ask for special funds.
“Other states owe salaries and Lagos, being the richest state, is asking for additional fund. It will only make other states poorer and Lagos State richer,” he said.
Hope Uzodimma (Imo West) also opposed the bill.
Senator Adeola Olamilekan (Lagos West), however, urged his colleagues not to politicise the bill.
Senators Phillip Aduda (FCT) and Gershon Bassey (Cross River South), in their submissions, argued that whatever special benefits Lagos would enjoy should be extended to the FCT.
They said the federal infrastructure in the nation’s capital also needed attention from the government.
But the proceedings became rowdy when the Chief Whip, Senator Olusola Adeyeye (Osun Central), who supported the bill, argued that the Federal Government should give Lagos special recognition just as it was doing for the Federal Capital Territory, Abuja.
He queried why the FCT was being subsidised by the Federal Government whereas taxes were being paid for same government services in Lagos.
He also queried why some northern states, which banned alcohol consumption, were benefiting from the revenue from the VAT paid on alcohol consumed in Lagos.
“In Lagos, all of us pay taxes; and all of this VAT is taken to Abuja. What we need to do is to say whatever is sauce for the goose is sauce for the gander. If it’s 13 per cent for Delta, Bayelsa, Rivers for (producing) oil, let it also be 13 per cent for Lagos for the VAT paid there.”
He added, “Until we have fiscal federalism, Lagos will not work; Calabar will not work; the FCT will not work. By the way, the FCT is a rotten pampered child.”