Taxation And The Budget

Following the presenta
tion of the 2016 budget to the National Assembly by President Muhammadu Buhari few days ago, there has been series of analysis on the budget by economists and non-economists alike. While some have described the N6.08 trillion budget which is predicted on an oil bench-mark of N38 per barrel as unrealistic going by the continuous dwindling of the oil price in the international market, others see it as a budget of hope as it will be funded to a large extent, through revenue from other non oil sectors and taxation.
No doubt, tax is a major source of revenue in many countries. Experts have posited that the bedrock of industrialization and economic development of any country is government revenue and over 70% of this revenue is got from tax. In most developed countries, the tax collected from all sources come back to tax payers in form of social amenities provided for them. The citizens enjoy uninterrupted power supply, good roads, good health facilities, constant water supply and other essential amenities. The citizens are therefore willing to pay tax as at when due. Incidentally, the situation is quite different in Nigeria.
Ours is a country where laws are made daily but are never kept. The Nigerian constitution contains many sections that deal with tax payment and tax evasion. How often do we apply these laws to compel individuals especially the rich and highly connected ones and corporate organizations to pay their taxes? How often are tax evaders and those who pay less than their income punished in accordance with the law? Is tax payment in Nigeria meant for only government employees and those working with corporate organizations? What about traders, artisans and other self employed citizens, are they exempted from tax payment. Do we have accurate data of tax payers in the country so as to ensure that they live up to their civic responsibilities?
Many times we have heard stories of tax evaders in the country and the difficulties faced by revenue collectors in collecting tax from tax payers in Nigeria but one will not be quick to blame those who try to dodge tax as there had been indications that these monies were either not remitted to the appropriate quarters, or not totaling done. We therefore have had a situation where those in charge of our taxes grow large at the expense of the poor tax payers.
Really, how can anyone convince tax payers in the country to pay their taxes willingly when government provides no amenities for the masses. People dig their private boreholes for water supply, they rely on generating sets for power, they contribute money to construct their roads. In some communities, the dwellers even contribute to buy drugs in the health centres. Even the God-given petroleum products are no longer within the reach of many Nigerians.
So, in as much as one supports the federal government’s plan to go for aggressive tax drive, government should ensure that these monies when collected do not disappear into few privileged individuals’ accounts while the generality of the people remain impoverished. Government at various levels must be responsible and carry out their obligations to the citizens responsibly. A give and take situation should actually be vigorously pursued, where the citizens part with their had-earned money and in return received essential amenities that will make life easy and more meaningful. Nigeria must be a country where laws are kept and so people must be made to pay their taxes or face the wrath of the law.
Perhaps the federal government also needs to consider the suggestions by some economists like the former economic adviser to President Olusegun Obasanjo, Prof Ode Ojowu who said, “although the details of the budget are sketchy but the idea of sourcing fund from taxes is something that requires amendment of law from the National Assembly”.
Ojowu further advised that if government needed to source for more funds from taxes, it can do that through a discriminatory Value Added Tax (VAT) policy through imposing higher taxes on luxury commodities while keeping the essential commodities low to prevent unnecessary hardship for ordinary people.
It will be recalled that the immediate past administration of President Goodluck Jonathan in a bid to battle the dwindling oil revenue raised taxes on luxury goods like wine, and other items mostly consumed by the rich. Perhaps, the current administration needs to consolidate on that policy in other to generate more revenue for the country. There must be a scheme to get the rich, who are believed not to pay tax to do so. Federal Government should also not relent in the on-going audit of all revenue generating agencies in the country.
In all, many believe what the federal government needs to succeed in the quest to make taxation a viable source of revenue is accountability, sincerity, impartiality and ensuring that the citizens actually benefit from huge taxes they pay.