By Abuchi Obiora
This discourse highlights the salient points in the controversial Nigerian Tax Reform Bills 2024 presently being debated in the House of Assembly as it also issues a caveat on the implementation of the bills when they are eventually passed into law.
By the way, who is afraid of a comprehensive tax reform in Nigeria and for what reason? Why are some Governors from the Northern part of Nigeria rejecting the tax reform Bills threatening to invoke fire, conjure thunder and rain down brimstone, if the House of Assembly passes the Bills and the President signs them into law?
The fact that the Nigerian Tax Reform Bills 2024 submitted by the presidency for the approval of the National Assembly has generated more interests and controversies than any other Bill from the Executive to the Legislature since the inception of the government of President Bola Ahmed Tinubu on 29thMay 2023 is not unexpected especially as the government is gradually picking up the toga of an oppressor that is determined to snuff out the remaining vibe in the economic and social lives of Nigerians through the introduction of economic and monetary policies that are seen by Nigerians to be anti-people.
The suspicion and perception of the Nigerian Tax Reform Bills by Nigerians as another oppressor’s game to further impoverish them is not helped with the memory by Nigerians of a mock “Let the poor breath” Bill passed by the Senate in circumstances that can be described as wry humor because that mock Bill was seen by Nigerians as the highest form of insult and insensitivity by a government whose sixteen mouths tenor so far in the office has impoverished more than 133 Million. Nigerians who have been reduced to the barest tolerable level of deprivation for a human being where many Nigerian citizens prefer the option of suicide, death, than live hopelessly.
Let us disregard the sufferings of Nigerians temporarily and examine whether or not the Tax Reform Bills proposed by the government will have any positive impact both on Nigeria and the citizens.
So, what is tax? A tax is a mandatory financial charge or levy imposed on a taxpayer (an individual or a legal entity) by a government or agency of government to support government spending and public expenditure collectively or to regulate and reduce negative externalities.
What are negative externalities, the reader may ask? Negative externality means the unanticipated, undeserved, negative impact of government taxation policy on a person or people who are not involved, not targeted but incidentally affected by government tax regime.
Economics identifies four major types of externalities that may bear on people not targeted by government tax policy and these are notably, Positive production, Positive consumption, Negative production and Negative consumption.
By the way, the Nigerian Tax Reform Bills 2024 are the products of the Presidential Committee on Fiscal Policy and Tax Reforms inaugurated by President Bola Ahmed Tinubu on assumption of office as the Executive President of Federal Republic of Nigeria. The committee had the mandate to do a complete and comprehensive overhaul of the tax, revenue and fiscal policies of the Federal Republic of Nigerian.
The Tax Reform Bills are made up of four different Bills namely;
- The Nigerian Tax Administration Bill.
- The Nigerian Revenue Service (Establishment) Bill.
- The Joint Revenue Board of Nigeria (Establishment) Bill.
- The Nigerian Tax Bill.
Meanwhile, tax reform as was undertaken by the Presidential Committee on Fiscal Policy and Tax Reforms is the process of arranging the ways taxes are collected or managed by the government and is usually undertaken to improve tax administration or to provide economic or social benefits through addressing negative externalities.
One thing that is beautifully captured in the Nigeria Tax Reform Bills 2024 is tax compliance, which is the veritable and inalienable factor that drives sustainable economic growth in any country. Tax compliance is the policy action and behavior aimed at ensuring that tax payers are paying the right amount of tax allowances and tax relief commensurate to their earnings and resources, liquid or illiquid.
The earnings from tax are applied to take care of negative externalities. I have written in a previous paragraph that negative externality occur when the production or consumption of goods or service has a negative impact on a third party. Subsidies and palliatives are the most two common means by which the government addresses and cushions the effects of negative externalities on the untargeted third party, the consumer. Three other more reliable, sophisticated and inbuilt systems with which a government can address negative externalities are tax relief, tax holiday and tax exemption.
The space available to me here will not permit me to elaborate the merits of these Nigerian Tax Reform Bills 2024, a 140-page document that has the great potential of turning the economic and fiscal fortunes of Nigeria as well as bridge the fastly-expanding gap between the “haves” and the “have-nots” in the country.
As a matter of fact, after perusing the document, I could find nothing in it that is anti anybody, not even northern Nigeria, a section of the country that I sincerely believe will be the greatest beneficiaries of the Bills in the long run because the Bills are sure to spur on the lazy and indolent ones in that part of the county to work and be useful to themselves and to the nation. The only demerit, in my view that may arise from the Nigerian Tax Reform Bills 2024, may emanate from their implementation and that will constitute my second line of discussion in this discourse.
Why are some Nigerians, including some Northern State Governors not looking at the positive side of the tax reform Bills which will make the low income earners (those Nigerian earning between N800,000 and N3m) of their subjects tax free, a development which will put more money to their pockets than considering the 60% Derivation which is the percentage (hitherto it was; Equality 50%, Population 30%, Derivation 20%, as against the present proposal: Equality 60%, Population 20%, Derivation 60%) in the formula prescribed by the Nigerian Tax Reform Bills 2024.
Though Lagos State with a VAT contribution as internally generated revenue to the federal purse of N249.77 billion (National Bureau of Statistics 2023 figure) stands at the topmost rung of the Derivation ladder and therefore is sure to reap an immediate advantage at the onset of the implementation of the reform, with Imo State at the lowest rung of the internally generated revenue ladder at N 235.41m (Imo State is the last being number thirty seven in the ladder of thirty six States plus FCT, Abuja), it is not likely that with competition which shall become a major feature of the new system when implemented, the indigenes of Imo State and indeed other States at the lower rungs of the ladder will pull out their investments from Lagos State to their States of origin to enhance the revenue of their States. This naturally will deplete the present revenue portfolio of Lagos State and such other States like Rivers State (at N70.59b), because the State Governors of those States at the lower rungs of the ladder will devise creative incentives to attract companies owned by their indigenes and jerk up their internally generated revenues in so doing.
The complaints against the proposed Nigerian Tax Reform Bills 2024 is a clear case of the greed of the Nigerian elites and some members of the political class especially from Northern Nigeria who are more interested in evading tax and receiving more money from the federation account for sharing than assisting in the development of government infrastructure.
It is ironical that some governors of the northern part of Nigeria which had from the inception of the country in 1960 benefitted more than any other part of the country from the crude oil wells of the South Southern part of the country (in spite of the fact that they subvertly oversee the illegal minning of gold in Zamfara State and precious stones/metals in Borno State) are complaining about the necessary balance and equity being sought by the Nigeria Tax Reform Bills 2024.
These Governors forget too early that poverty and penury have brewed overtime in Northern Nigeria within the consecutive tenors of their sons as either civilian Presidents or Military Heads of State wherefore that region has become the poverty capital of Nigeria in spite of its natural resources of the land with an overflowing population.
Why has Northern Nigeria refused to optimize the use of the region’s two most valuable and necessary assets of “land” and “labour” which are the two most essential components in the foursome factors of production? Is it not common sense that “capital” and “organization/management” which are the remaining two components/factors of production can be accessed through proper allotment and deployment of land and labour in corporate equilty-sharing?
My opinion is that in the same manner that the snowball effects of the removal of subsidy from petroleum products challenged many Nigerians especially those from the Northern part of the country to seek more creative ways of staying afloat, the Nigerian Tax Reform Bills 2024 is the absolute panacea for getting northern Nigerian youths to productive ventures utilizing the immense land and population resources that are available to them.
The truth is that the world has moved away from the medieval, feudalist lifestyles and Nigeria as a country must move along with the world or be left behind by the world. People who have decided not to work but to produce more innocent children who they spurn into the streets with plates and come back and wait to share from a fastly-diminishing national cake should be made to wake up and compete in the manner the Nigerian Tax Reform Bill 2024 has proposed, otherwise, let them starve.
As I discuss the Nigerian Tax Reform Bills 2024, I do not forget that I still have filed away in my library, a newspaper copy of an interview granted by Senator Bola Ahmed Tinubu, now Mr. President, where he said that he did not believe in a one Nigeria where inequality and injustice hold sway. That was during the NADECO (National Democratic Coalition) days of those dark years of Nigeria’s political history.
In my assessment, nothing much has changed in Nigeria to have made the Senator, now President of the Federal Republic of Nigeria to change his views on Nigeria, injustice and inequality. My assumption now is that being the President of the Federal Republic may have given the man an opportunity to walk his talk and achieve his dream of helping Nigerians not to continue to be in a country that reels in injustice and inequality. I have also found out that all the issues the man touched on in that interview constitute pathfinders to his present policy direction as the President of the Federal Republic.
This further gives me the impression that the man, the President of the Federal Republic of Nigeria is consistent in terms of his political ideology. What may not be consistent about him could be the means to achieving his political ideology and putting it to work. But does ‘the end justifies the means’, as practiced around the world by seasoned and suave politicians not constitute the wise path to the reformation of any human society?
As we approach the end of this discourse, let me say that as a document, the Nigerian Tax Reform Bills 2024 is good, very good indeed, but some holes need to be plugged to ensure the survival, effectiveness and sustenance of the policy. When one plants a crop and expects a buoyant harvest, one must do the enabling things to assist the crop prosper, including, may be, applying the fertilizer, otherwise one will reap a lean harvest. What the government may have planned to do, if it does not consider doing what I will suggest in the last lap of this discourse is to reap a lean harvest or even, in a worst case scenario, to strangulate the crop through not watering it.
Consequent on the above, my only objection in the Nigerian Tax Reform Bills 2024 is not taken from the selfish and myopic disposition of some Governors of Northern Nigeria who are more interested in reaping from where they did not sow. My objection is focused on the fact that the government seem not to be providing the enabling environment to guarantee the success of the Nigerian Tax Reform Bills 2024 when they are signed into law and launched.
First, the government seem to lack the reputation for sincerity, always being entangled in double-speak or outright lies. Secondly, executive recklessness and extravagance is taking away the shine from the good intentions of the government.
Thirdly, and most importantly, the government is weak, very weak in fighting corruption, sometimes, seen to condole corruption for political expediency.
So, I think that the government can start now to convince Nigerians that it actually means well with the Nigerian Tax Reform Bills 2024 by taking a proper and corrective view of the enabling laws on corruption and stealing while people are in government services.
It will not be a bad idea if the Government, through the legislature, examine all laws applicable to the administration of criminal justice in Nigeria.
The right Honourable Alfred (Baron) Lord Dennings, OM, PC, British Judge (23rd January 1899 – 5th March 1999) who was Master of the Roles or Senior Judge in the Court of Appeal of England and Wales, also called “The People’s Judge” wrote in one of his books “The Road to Justice”( a collection of his addresses to the Canadian and American Bar Associations) that “ How does one know what is justice? It is not the product of his intellect but of his spirit. The nearest we can get to defining justice is to say that it is what the RIGHT-MINDED members of the community – those who have the RIGHT SPIRIT within them – believe to be fair.”
The above definition of justice talks about the ultimate responsibility of the Lawyer/Judge as the standard bearer for the values of the human society.
Nigerian Lawyers/Judges should understand that laws should serve as a deterrent to crime and not encourage crime, and also discourage accessories to crime, who very often are members of the law enforcement agencies on whose shoulders the burden of curbing crime rests. It may be too difficult for agents of government, lawyers and judges to reject offers of bribes to the tune of hundreds of millions of naira from economic criminals and bandits who may have stolen billions of naira from the common patrimony.
For example, it is good business for a former Governor of a State in Nigeria who is being charged for stealing N80b to be granted bail for N500m because he will walk the streets and go around people involved in adjudicating his case, pay them off and secure his freedom. This is the dilemma of the administration of criminal justice in Nigeria which legal jurisprudence officers should quickly look into to strengthen the laws in that area and limit the rampant application of “Technicalities” in laws which are supposed to exonerate suspects that have not been incriminated beyond reasonable doubts within the limits of the Evidence Act.
Perhaps to get the benefits of the Nigerian Tax Reform Bills 2024 to bear positively on the economy, government should consider the seizure of ill-acquired wealth and life sentences with no option of fine, or future Presidential pardon (which methods criminals in government use to set their fellow criminals free in Nigeria) for first-time offenders and seizure of ill-acquired wealth and death sentences by hanging for second-time offenders.
Additionally, long jail sentences of between thirty to fifty years behind bars will not be bad for economic saboteurs who are accomplices and accessories to the economic crime of stealing in office, including security agents of government agencies who are saddled with investigating and fighting corruption but not excluding also lawyers and judges who may have been found wanting and culpable as accomplices and accessories to the crime through their acts of compromising the prescribed rules and orders in discharging their services.
If the government refuses to take these measures to strengthen the Nigerian Tax Reform Bills 2024 and bring those laws to the brass tacks of helping to develop the economy, those Nigerian Tax Reform Bills 2024 may go down as a futile exercise akin to putting the cart before the horse, and the horse in a stationary condition unprompted, will be watching the cart put before it, not knowing what it should do with it.
If this happens, it will be dead on arrival for the Nigerian Tax Reform Bills/Laws 2024.
ABUCHI OBIORA
GLOBAL UP FRONT NEWSPAPER
The Kaleidoscope Archives
abuchiobioraonline@gmail.com
abuchiobiora@gmail.com
