Opinion
On Tax Dodging Strategies
As an old police officer, an investigative journalist and a research fellow, one takes keen interest in nosing around to find out what is brewing in one’s neighbourhood. Leaving aside other malfeasance that are obvious, tax evasion is quite relevant in view of the need to stress human tendency to get even with a system that operates on the basis of chicanery and mendacity. Tax dodgers would say bluntly that they have no moral obligation to contribute towards the sustenance of a corruption-driven system, where tax collectors operate a “black hole” strategy. The black hole leaks into private purse.
After the Dele Giwa saga, the tribe of research journalists became an endangered species, but even then, the habit of nosing around remains a noble tribute to the profession of journalism. The urge to pay clever administrators back in their own coins began during military intervention in politics, particularly after the “Gulf War wind-fall” and the way that an Okigbo panel report on the issue was handled. When a people perceive that they are being hoodwinked by a cult of elites, the reaction usually includes tax evasion, or sit-down-and-watch attitude.
Ask church members how they react, seeing their General Overseers buy private jets and build private universities, their answers would be that tithes, donations, offerings and sowing of seeds have reduced. Ask university students why examination malpractices are common, they would tell you that the malfeasance would stop when Nigeria can have free, fair and malpractice-free elections and operate a corruption-free public administration. Then ask Nigerian business entrepreneurs their attitude towards tax payment and you would be told that they have issues with correct tax remittances and equity in tax assessment.
Strategies in tax evasion include operating of business activities in obscure places – private residences, gardens, kitchens, etc. With massive loss of jobs in recent times, small-scale business operators set out even without registration of the business names or observing regulations on company laws. That would be like asking thieves to tell the police details of their activities. Ranging from fisheries, cattle ranching etc, to different kinds of production and manufacturing, entrepreneurs engage in packaging, repackaging, book pirating and fabrication of various goods, in privacy.
Paints, cosmetics and other chemical manufacturing companies operate in residential areas, without any environmental impact assessment and other business clearance documents. Not even any name for purposes of identification! Of course, reasons for such concealment and clandestine operations include tax evasion and keeping the eyes of kidnappers away from such operators. Residents in such neighbourhood may have faint ideas of such activities through some unbearable smell, noise or when quarrels arise when some customers get short-changed. Police would not come!
Water and drug packaging are common clandestine business operations and tax evaders. After the death of Professor Dorah Akunyili, illegal drug business operators have emerged again with hardly believable bravado and strategies. So also brothel business, jokingly called “slaughter houses,” of which there are increasing numbers in urban towns. Many of them even operate in private homes. Such slaughter houses charge as much as N5,000.00 for one hour outing spent in privacy. Intimidation and threats await any intruder into such taxable businesses by their operators. Do tax collectors ever check the cash books of such houses of lewdness?
Even schools and consultancies operate in such manners and premises that tax agencies rarely know anything about. Perhaps it would not be wrong to say that the most clever and sanctimonious tax dodgers and evaders are religious bodies that grow fast and operate on commercial basis. Such cash-and-carry strategies include levies for some exorcism and redemption purposes, for which there are numerous “ministries”. Money-spinning businesses should be liable to taxation and auditing.
Perhaps, illegal bunkering has deliberately been made to receive great attention while illegal mining which is equally an economic malfeasance, goes on in some parts of the country, unchecked. Economic crimes go beyond bribery and corruption, but tax evasion which is a part thereof, deserves stricter attention. Tax equity is a part of democratic ideals.
Dr. Amirize is a retired lecturer at the Rivers State University, Port Harcourt.
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