Nigeria: The Unplanned Economy 11 (Oiling the Economy without Taxes Part 4)

By Ikenga Chronicles December 28, 2017

Nigeria: The Unplanned Economy 11 (Oiling the Economy without Taxes Part 4)

—¬†Baron Roy

The government at the centre has failed to see the importance of taxes and Tax Administration. The citizen hardly knows either. We have been mired in ignorance since 1966, and we have unwittingly shortchanged ourselves with the structure we have “adopted”.

Taxes are a social contract between the government and the governed. The governed pay the taxes, the government applies the tax income for the general good. Once taxes are paid, the citizens MUST expect social benefits in infrastructure, services, security, and the good life. We have established that 13% of the workforce, and 9% of businesses pay taxes in Nigeria. And they pay only what the federal and state governments could capture. The bulk of the potential tax revenue is either not paid or bilked. With the poor tax administration, there is no social contract with the government. So when people demand for good roads, electricity, hospitals, good economy and so forth, those demands are inherently absurd! How could you make demands when you contribute nothing? The government doesn’t owe us, and we don’t owe them! They mind their business, we mind ours.The country suffers, and everybody lives happily ever after!

In a recent academic survey on taxation in Nigeria, 70.5% of the respondents couldn’t be bothered! 7.5% demonstrated their readiness to pay taxes, 22% responded that they would only pay if they see the results! It is that bad.

In Holland, one is jailed for a maximum of 10 years for the crime of murder, and jailed for LIFE for Tax Evasion! In Nigeria, tax evasion is the fundamental human right of the citizen! We have numerous cases of people who declare a net worth of 10 billion Naira, but reflect a tax of 500,000 per annum! They are governors and presidents today. They get into public service and ask us to pay taxes or they would fight corruption! How do they say those things with a straight face? I always feel it’s some sick joke!

In the research carried out, Nigeria has the capacity of 67 Trillion Naira in tax income, but gets only about 6 trillion! Why is that?

The Caliphate-backed federal government took over Nigeria on 29th July, 1966. They had been blowing hot about the Unitary Decree 33 of Aguiyi Ironsi and were determined to reverse it. They executed a successful coup, brutally repressed the uprising in the South East and Midwest, overran the country, gained access to the oil wealth, and corruptly kept the unitary system they executed a coup to reverse! What hypocrisy!

The military government era in Nigeria, was essentially a Northern affair–an extension of the Caliphate. On May 29 1999, the military men removed their uniforms and reverted to the civilian mode–we are yet to revert to democracy. A proof of this is the 1999 Constitution. The constitution is a confirmation of the much-hated Unitary Decrees 33 & 34. With that constitution, Tax Administration was given a Requiem Mass–tax administration was given the final burial rites– and the Niger Delta officially certified as the only goose that must lay ALL the eggs–golden or otherwise! They feed us all, whether they like it or not! Evil!

Never mind the existence of FIRS and their state counterparts, I have more data on my android phone than the Joint Tax Board. Organized Data is the very basis of Tax Administration and that is exactly what we do not have. The municipal database is the very basis for tax administration, but the military constitution neither recognizes the municipality, nor does it assign anything to it!

The unitary system makes Tax Administration very difficult. We have sacrificed a possible 60 trillion income due to the structure. We have inadvertently made ourselves a poor country just because of the ridiculous structure and a hilarious constitution. We shouldn’t be poor really.The government of the day does NOT use that constitution! That constitution is only meant to get the resources of the Niger Delta to satisfy the desires of a few! That’s all the constitution is meant for. With that document, taxes cannot be administered, and the economy cannot be oiled! As long as that document subsists, economic development shall continue to be a distant dream!

(To be continued)