Following the global fall in
oil prices and the negative   effect on the naira, many especially the ordinary man on the street are questioning the rationale for government to continue with the same tax regime.
The thinking is that since individuals and corporate organizations purchasing power has fallen, it behoves the government to do something towards reducing taxes.
However, senior partner, Ikata, Ikata and Company, Port Harcourt, Mr Iduoku, Ikata has said that such reprieve was not possible on the part of the government.
Ikata, a tax expert, who spoke to our correspondent on Wednesday in an exclusive interview explained that government was the loser as the taxes paid presently were not enough to run government business.
According to him, since tax revenue has become a substantial component of government income, the government would not be in a hurry to lower tax rates.
He said even though government  was aware that the purchasing power of the ordinary man has dropped, what government could do was, only to introduce palliative measures.
Ikata said the drop in the value of the naira has shot up the cost of production for the government including cost of running government.
He said the Nigerian system was an import dependent economy and that most of the things that drive its activities are imported.
Explaining further, he stated, that if we were still importing petrol with the attendant subsidy costs, it means that government would pay more to secure the same amount of dollars that they used to spend before.
“The government which is now spending more naira to buy the same amount of dollars for petrol, cannot reduce the source of its income (tax), he said
Government, the tax expert pointed out, would not for whatever political reasons increase the price of petrol even as he said it was not logical to ask government to drop tax rates.
For instance, he continued, the same amount of tax that has been paid to government before the naira devaluation was the same being paid today.
This development according to him has increased government spending of more naira in contrast to the past.
In addition, Ikata explained that the argument in some quarters is that the reduction in taxes would encourage more people to be tax compliant.
This he said was because a lot of the tax payers evade tax on account that rates are high so if they are lowered the likelihood of more people paying taxes willingly would increase.
“If the tax rate is lowered some people can just walk into the tax offices and say look, I come to pay my tax” he said, with this tax reduction process Ikata said, people would be encouraged to surrender willfully to tax regimes even as he said the argument had nothing to do with the devaluation of the naira.
On possible palliatives, he said for any palliative that government would introduce in relation to the devaluation of the naira depends on the political will of government.
“The previous government came up with SURE-P but how did we benefit from the programme. So basically it remains a function of government’s political will to make sure that such palliatives work.

King Osila