2016 budget Proposal: Kano’s State VAT Revenue Projections-conservative or overly optimistic?

Abiola Afolabi

Kano, Nigeria’s most populated state according to the 2006 census figure is aiming to cumulate N18bn as its expected Value Added Tax (VAT) receipt in 2016, a projection that may turn out to be conservative.The revenue generated from the Value Added Tax between January and September 2015 is estimated at approximately N10.9bn as against N10.6bn the state projected for the 2015 fiscal year. Notwithstanding, the State’s revenue in 2015 was dismal. The state was hoping to collect N210.76bn in 2015 but as at September, the revenue receipt was only N58.9bn.

Moving forward, Kano state maintained its conservativeness, projecting N18bn for the fiscal year 2016-which represents only 2.54% of projected state government share of VAT receipt as containing in the medium term expenditure framework and fiscal paper.Interestingly, in January 2015, the State’s share of the N35.26bn VAT receipt distributed to State’s across the federation was N1.36bn or 3.84%. Through 2015, Kano’s share averages 3.7% of total VAT receipt shared among States.

Despite its conservative VAT projections, Kano’s population renders this figure abysmal, especially when compared with Lagos, where VAT receipts averages N6.2bn monthly in 2015 or N75bn. Kano state must harness its industrial base, agricultural conclaves, its working population and solid mineral potentials to turn around its fiscal state.

Article by Olunike Oyaleke.