Ours has been a country where, at the slightest national economic misfortune, the government comes down hard on the common man. Economic sacrifices are demanded from the poor that tighten their financial crunch the more and grind their day-to-day living with additional poverty. But stupendously rich individuals, corporate entities and the ruling elite hardly make tax sacrifices. Yet we live in a world where most advanced countries, whether in Europe or the Americas, rely on taxes to thrive.
Presently, ordinary Nigerians pay the price of Federal Government and its agencies’ ineptitude and failure to run a profitable upstream and downstream oil sector. Any dislocation in those sectors is passed to ordinary Nigerians as fuel price increase. The same goes for the electricity sector, where the burden of frequent increases in tariff, now christened as Multi-Year Tariff Order (MYTO), is the rogue official term given to the extortion of money from ordinary citizens for electricity neither supplied nor consumed. At the slightest opportunity in Nigeria, the burden of daily existence is pushed by constituted authorities to the weak and vulnerable, while those who are privileged to penetrate and reap bountifully from the system escape with their loot. In spite of the stupendous wealth they harvest from the system, they find it extremely difficult to give back to the system. In Nigeria, making the nouveaux riches to pay taxes to sustain the survival of the system that generously endow them with unmerited wealth is like forcing a camel to pass through the eye of a needle.
Last week, the Independent Corrupt Practices and Other Related Offences Commission (ICPC) purportedly commenced probe of about 12 big tax offenders, mostly construction firms, which allegedly failed to pay tax for several years. Their total tax bills amount to roughly N2 trillion, reports say. The companies were doing business with the Federal Ministry of Works with forged tax certificates. When another N2 trillion is added to the N2 trillion tax money they denied the FG, Nigeria’s one year budget would have been made up.
About the middle of 2006, the House of Representatives Committee on Petroleum Resources also uncovered that Chevron, a multinational oil giant, evaded tax amounting to $10.8 billion (about N140 billion). The outcome of that shock find is yet unknown to the public. Lately too, British Airways admitted to have evaded tax in Nigeria. But it ‘defended itself’ before the Senate, claiming it was not only it that failed to remit the lawfully prescribed five percent charge on airfares to the Nigeria Civil Aviation Authority (NCAA). Last December, the Nigeria Labour Congress (NLC) lamented as well that a great percentage of the rich (the affluent and property owners) in the country hardly paid tax.
Multiple taxes have been a running controversy nationwide because of the economic nuisance they constitute, as well as the violence and deaths that attend their collection at the state and local government levels of governance especially. But despite the countless number of taxes on ground, state governments hardly garner meaningful internally generated revenue from taxes. That is why most of them desperately look forward to their monthly statutory revenue allocations from the Federation Account, even in these times of lean oil revenue.
The Federal Inland Revenue Service (FIRS) and the Joint Tax Board (JTB), managers and regulators of the nation’s tax system revel in churning out harmonized tax regulations on daily basis. But such directives have neither translated to improved tax collection nor addressed the problem of tax evasion. Least attention is paid to how officialdom and immoral banks compromise tax collection through crass ineptitude and corruption, cankerworms that are not strange to both the ICPC and the Economic and Financial Crimes Commission (EFCC). What stern measures have been taken to stem the tide? Indeed, what hope is there that the current ICPC red herring will break the jinx without culpable big shots or corporate organisations being caught, disgraced, prosecuted and punished? How come it is only during elections that default in tax payment is taken seriously?
The truth, it would seem, is that government’s three years’ tax clearance policy, 30-day provisional tax for corporate bodies, and the latter’s declaration of dividends as measures against tax evasion, are commendable. But they are not working. What will help is flushing out the fat cats that have compromised tax collection in the relevant tax regulatory agencies and their accomplices in the EFCC and ICPC that frustrate the proper investigation, prosecution and punishment of big time tax evaders. No threats, measures or laws made to reverse the trend may work until the needful, as has been recommended, is done.
