Ogun makes case for derivation fund from corporate income tax

…constructs 1,600km roads, 4,000 housing units to attract more investments, revenue

Going by the increased number of localised industries and manufacturing hubs in Ogun State, which has given new nomenclature of ‘Industrial Hub of Nigeria’ to the State, Ogun State Government is putting forward a legal proposal, asking Federal Government to set aside some derivation fund from Corporate Income Tax (CIT) for States like Ogun.

Like the Oil-Producing States which collect 13% Derivation Fund from the Federation Accounts Allocation Committee (FAAC) on production, the Ogun State Governments is desirous of collecting derivation fund from the FAAC being the cost of wear and tear in terms of pressure, which haulage of goods and services as well as raw materials put on the road infrastructure, coupled with the cost of environmental pollution.

Speaking at the 2026 Ogun State Budget Breakdown and Implementation Analysis Session held in Abeokuta on Tuesda, Dapo Okubadejo, Commissioner for Finance and Chief Economic Adviser, declared that in as much as there were robust tax reforms in Nigeria, there should be an overview of how revenue were generated from taxation and States that suffer direct consequences as a result of tax collection should be taken care of.

“I know it’s a matter of law but, there should be a move for States like Ogun to demand derivation fund on Corporate Income Tax being the Industrial Hub of Nigeria, just like Oil-Producing States. Pressure being put on the roads, bridges and entire infrastructure on a daily basis as a result of movement of heavy-duty vehicles on our roads as well as environmental pollution should be compensated in form of derivation fund”, Okubadejo said.

Okubadejo, who spoke in company of Jamiu Omoniyi, Commissioner for Housing; Ade Akinsanya, Commissioner for Works and Infrastructure; Gbenga Dairo, Commissioner for Transportation; Abayomi Arigbabu, Professor and Commissioner for Education, Science and Technology, among others, noted that series of capital projects are being undertaken to better reposition the State’s economy.

He said that over 1,600 kilometres of roads had been constructed across the 20 Local Government Areas of the State and a total of 4,000 housing units had been completed to boost the economic growth and revenue generation of the State.

He stated that the State Government is deliberate in undertaking capital projects in order to attract more investment and ensure that befitting housing units are constructed to attract more high networth individuals to live more in the State in order to earn more Pay-As-You-Earn (PAYE).

On the state’s fiscal outlook, Okubadejo revealed that the 2026 budget increased from ₦1.054 trillion in 2025 to ₦1.668 trillion, while Ogun’s economy expanded from ₦3.5 trillion in 2019 to ₦18.96 trillion in 2026.

He added that IGR grew from ₦50 billion in 2019 to ₦240 billion in 2025, with projections of ₦512 billion this year.

Also speaking, Olaolu Olabimtan, Commissioner for Budget and Economic Planning, said the 2026 budget reflects strong fiscal reforms, noting an 85 per cent budget execution rate in 2024 and sustained financial stability.

Other commissioners highlighted sectoral achievements, including massive road construction, increased healthcare funding, rail extension plans, education support programmes, and expanded housing projects across the State.