Killing the economy softly?

A nation’s economy cannot afford to run without a focus; targets should be attained not only on the jobs people do, but also government’s ability create an enabling environment for businesses to thrive and to generate revenue through a highly-effective taxing system.

Notably, economies of the West are robustly grown and sustained through taxes. In those economies, it is a ‘traditional’ part of every business to take on the responsibility of tax payment.
In those climes also, the law takes its course naturally if and when businesses default in tax payment.

So, it is not always a palatable area for any business to tread.
Interestingly, the case is an entirely different one in Nigeria, where businesses that can even be said to be doing well, ease themselves of the fundamental responsibility of tax payment.
In this regard, the news of import duty and tax default by some12 companies, amounting to over N15 billion does not tell well such business that have directly undermined the importance of government revenue in stabilizing the nation’s economy.
It is not encouraging to know that the defaulting companies, which operate in a viable transport sector are indebted in duty payment to as much as N3.5 billion; N2.2 billion; N1.8billion; N1.6 billion and others within the same range.
With the reports that the Federal Government could blacklist the companies involved for defiling the condition of a fast-track system, which was meant to reduce the delays involved in cargo clearance, it will act as a note of warning to other businesses too.
It is important to note that stakeholders’ complaints of delays suffered in clearing of goods prompted the government to develop the fast-track system to address the issue, as a way of facilitating trade, particularly for business owners with proven record of integrity.
Showing a case of abuse of trust on which they were allowed to operate on the fast-track system, the companies were alleged to have repeatedly acted against the guidelines of the system, which resulted in the huge amount unpaid.
While the Nigerian Customs Service, which is responsible for the collection of duties, has approached the matter with great care, it is the responsibility of the affected companies to live up to their responsibility as mandatory.
It would be recalled also that the ugly practice of tax default by some firms in the oil and gas sector made the Federal Inland Revenue Service (FIRS) launch a ‘ward round’ on the defaulting firms on two separate exercises in the month of October. The exercises which took place in Lagos alone covered 11 companies.
While the FIRS was able to recover about N250 million from the first exercise, the unfolding events should that a number of the companies only decide to act in the way they did, not because they could not pay up their taxes.
Media reports had it that the FIRS had appealed in several non-combative ways for the payment to be done, but the firms did not budge; not even after series of visits to them for discussions. It was bad enough that a number of the companies did not even file in returns for years. It was only during the enforcement drive that some of them decided to make commitment for payment.
It is certain that the agencies of government that are saddled with the tax/ duty collection responsibility must take advantage of the act establishing their authority to collect all such revenue for government.
In line with this concern however, the FIRS says it gives room for understanding if and when a business is faced with some challenges at some time, as a way of encouraging businesses operate with some level of ease and not under harsh environment.