Governors And Taxes
Sam Nda-Isaiah
Last Wednesday in Abuja, governors of the 36 states agreed to pay more attention to the collection of taxes. That is a good move, but I only hope the governors know exactly what they are going into. Collection of taxes is a very serious business in virtually every other country of the world except Nigeria. Until recently, when easy revenues from crude oil started to dry up due principally to falling international prices and the criminal activities in the Niger Delta, governors had paid scant attention to the collection of taxes and other alternative sources of revenue. All they have been doing is wait for the month end for the allocation from the central government.
Governments at all levels in Nigeria probably haven’t placed a premium on taxes because they know they would be compelled to become more accountable if taxes become the main source of revenue. But if there is any lesson to be learnt from the crisis in the Niger Delta, it is that reliance on a mono-product revenue stream is the most harebrained, if not irresponsible, way of running a government.
Before now, the only public servant that took the issue of taxes very seriously is Mrs Ifueko Omoigui-Okauru, the chairman of the Federal Inland Revenue Service (FIRS), who has taken her interest beyond the call of duty and has had to fight battles on several fronts, especially against dubious tax consultants who act as fronts for some governors. It appears that things are about to change – and it’s about time, too.The good thing about relying on taxes is that the governors would become more creative in getting more people into jobs so that more taxes would be paid. A state that would rely on taxes must necessarily create more jobs. And, as we know, the creation of jobs is the single most important job of any government, even though it does not appear in any way as if those who rule Nigeria today know this.
Today, the president and the governors, not to talk of the local government chairmen, do not appear to appreciate this fact. In Nigeria, the president and the governors are so complacent that they do not even know the employment figures in their domains. When taxes start becoming their main source of revenue, as it should, they will be forced to start paying attention to employment rates. And when people really start paying taxes, they also become more attentive and sensitive to how the money is deployed. If the people start paying taxes, they will start asking, more angrily, why there is no electric power supply, or why the taps in their homes do not run with clean water. The people will also start asking why there are no medicines in public hospitals and why all public schools are dead. The governors’ new agenda on taxes is right on point but they must also consider that people will start asking very rude questions about how their money is used.
No one loves paying taxes even in developed economies, but people pay because they see the benefit of paying. It was President Barack Obama who once said that people don’t like paying taxes but they know they have to pay. It is only through taxes that the wheels of government are run. Evasion of taxes is one of the most grievous offences anyone can commit in very serious countries. It is a very, very intolerable transgression against the state.
Today, Nigerians do not pay taxes because they know their money would be stolen by those in charge. In a country where the richest men are those in public office or those who recently held public office and not businessmen, it is hard to find people paying taxes. But when people think that their taxes will be deployed wisely, they will pay.
Lagos State is an example of a state that relies heavily on taxes. Even though Lagosians are complaining of being overtaxed, more than 90% of them will still vote for Governor Raji Fashola, the incumbent governor, in 2011. In fact, if for any reason Fashola refuses to seek re-election, Lagosians will, for the first time, “down tools” to force a person to join a race – and I am not talking about “area boys” here.
When governors rely on taxes to run their states, they will also create the enabling condition for businesses to flourish. In almost all states of the federation, especially in the Northern states, there are several mineral resources waiting to be explored but the easy money from oil has blocked the gumption to do so. If taxes become an issue, governors will encourage companies, both indigenous and foreign, to set up shops in their states that will generate more revenues from the payment of taxes. And one has not even considered the vast agricultural potentials available in virtually all the states.
In South Africa where taxes are a serious matter, for instance, Trevor Manuel, the super-minister in charge of national planning, had to answer questions from the opposition, about a month ago, as to why he had to purchase a BMW 7-series as his official car. The very powerful opposition had asked him in parliament to return the car for a cheaper one especially because of the cost of maintenance. Trevor Manuel went to great lengths to explain why it would in fact be more expensive to return the car after he had used it for nearly one year. That is the kind of discussion that currently goes on in South Africa.
In Nigeria, nobody asks a governor where he got the money to buy personal houses in London, New York, Cape Town and Dubai, all within the same year in which he also acquired five new personal jeeps and married a brand new state-of-the-art wife. In South Africa and in most other countries, the term “taxpayer money” has meaning. In Nigeria, it is really oil money.Payment of taxes is good, after all.
E A R S H O T
Putting Corruption To Death
EFCC chairman Farida Waziri made an assertion last week that has attracted little attention. She said that we should apply the Chinese-style capital punishment for those who steal public money. It is doubtful if the current members of the National Assembly will ever pass this kind of law – for obvious reasons – but we all must start thinking about it. At some point in this country, it must become the law. There is no point allowing anyone who steals public money and deprives the nation of good schools, good roads, good public transport system, good hospitals and other infrastructure to live. Such a person’s action, of course, must have led to the death of several innocent people, including children.
There should be no argument about this if China, which shows the example, is doing so well. Corruption is Nigeria’s greatest problem, and that is why, today, Nigeria has become a poor country of rich men. And most of the rich men are not even the business people. Today, many local government chairmen are richer than their local governments and many governors (both current and past) are richer than their states. Until we start meting out very harsh treatment, we will surely become a failed state.
People who steal public funds should be joined with murderers, drug pushers, armed robbers and kidnappers and put to death. Their vocation kills the society; that is why.
November 29, 2009
Tags: EFCC, FIRS, Governor, Nigeria, Taxes Posted in: Sam Nda-Isaiah
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