Tax Evasion As A National Plague

Tax evasion can be described as an extension and part of the “419” culture which is common and widespread in Nigeria. Such economic crimes have been perfected by those who practice them, but such practices deserve serious attention and efforts be made to check them. Those who engage in tax evasion and similar economic crimes are usually not small persons but “big shots”.
The principle of taxation is based on the notion of what is known as horizontal equity, or the equal treatment of equals without discrimination. What is known as vertical equity is the redistribution of a nation’s wealth so that there are no extremes of wealth or poverty.
It is not a question of charity or poverty alleviation, but a question of sound political economy, a situation  where a society does not breed predators and parasites. There is no doubt that there are such predators and parasites in Nigeria, operating as individuals, mafia or interest groups.
In modern societies, there are three varieties of taxes, namely: Direct taxes, which are paid by individuals on earnings from labour, rents, dividends and interests. This also includes corporate taxes calculated on taxable profits of companies. Then there is indirect taxes which includes levies on expenditure on goods and services of which the most commonly known is value added tax (VAT).
The third variety is wealth or property taxes, which includes levies on property, transfers of wealth or property, capital and securities or bonds. It is in the second and third category of taxes where real tax evasion and fraudulent practices abound most. Tax fraud is a universal practice but it thrives most in countries where record keeping is poor and where people can get away with manipulation and doctoring of documents.
Does the Nigerian business tycoon keep accurate and reliable records of his transactions and activities? Are there not Nigerians who own over 70 landed properties and huge investments located within and outside the country? How much do they pay annually as taxes, and do they ever admit that they are owners of such properties?
Either their wives are the owners or we find situations where children in secondary schools own properties worth billions of naira. Do we find genuine records of ownership of properties in Nigeria? Whether such properties are unoccupied mansions in Ikoyi, or a factory somewhere, can we find reliable records about their owners? There would always be controversies and counter-claims when a need arises for verification of such properties.
Two important factors about taxes are Equity, and Efficiency, without which, every system of taxation would be mere charade, characterized by fraud. Our system of taxation in Nigeria, associated with colonial exploits and brigandage, definitely introduced fraud, inequity and consequently, resistance by the masses.
Like current revenue sharing formula, taxation is perceived by the masses, not only as a social nuisance, but also a means of political patronage. Who are those who enjoy tax waivers as a way of encouraging them to create jobs for Nigerians and boost the economy?
Helpless civil servants, whose earnings are known and verifiable, are those who bear the brunt of taxation and don’t enjoy any waiver or patronage. Even pensioners, despite their ailing health and meager pensions, are not spared by ruthless tax collectors.
Taxation in Nigeria has not been characterized by equity and efficiency, a situation which gives rise to sharp practices in financial book-keeping and tax evasion by individuals and corporate bodies. A situation where highly-placed persons cannot make honest declaration of their assets, cannot foster equity. How would taxation be efficient where tax collectors get compromised or fear to assess the income of some people and tax them accordingly?
From personal income taxes, to revenue accruing from mineral oil, there are serious lapses and distortions in the country’s revenue profile. Similarly, expenditure patterns hardly elicit the confidence of the masses. How much of oil and tax-payers’ money do we spend on foreign travels, treatments, sponsorship of pilgrimages, fumigation to destroy rodents, etc, etc.
The incomes of those who make huge donations to political parties should be investigated and assessed for equitable taxation. But, the assessors and collectors are rarely strict or efficient in their task.
Dr. Amirize is a retired lecturer from Rivers State University.
e-mail:bamirize@yahoo.com.

Bright Amirize