Tax amnesty and the other side of the coin


In the past few months there appears to be an unusual vitality behind the government’s drive to increase its tax earnings. This vigour can be attributed to many reasons or a combination of the prevailing economic realities – the largely unrealistic budget predicated on sheer optimism, the uncertainty in the crude oil market from where a greater percentage of the country’s foreign earnings is derived, and of course the pressure on the Naira. In the last quarter alone, the officials of government, including the Acting President; have made weighty pronouncements on tax remission in the country. In fact, the Acting President while signing the Executive Order on the Voluntary Asset and Income Declaration Scheme, VAIDS, on Thursday, June 21, 2017 pronounced a 9-month amnesty for tax evaders to declare their “hidden assets” and avoid impending sanctions and trial. In all of this, it is simply fair to commend the dexterity and pedigree of the man leading the drive at the Federal Inland Revenue Service, FIRS, Dr. Babatunde Fowler.

That the government is finally intensifying efforts to generate significant revenue from tax is laudable. Other countries with proper structures have used tax proceeds to advance their economies and encourage citizens to be faithful adherents. The expectation is that the new vigour will lead to a significant increase in the contribution of tax to the financing of the country’s annual budget. However, the government appears to be driving the citizenry to respond to their obligation without a commensurate redirection on the part of government. The relevant authorities need to appreciate that the two parties in this arrangement – tax payer and tax collector – have respective responsibilities. It is the responsibility of the government to collect taxes fairly and effectively use the proceeds to provide security of lives and property, and the much needed social amenities that will benefit the citizens. A people that constantly benefits from the provision of the government, funded by their taxes, are further stimulated to respond to their obligation.

For many years, the Nigerian government has consistently fallen short in this regard and has taken the tax payers for granted. The country is still characterised by insecurity, epileptic power situation that has thrown away any form of hope, deplorable roads, food insecurity, a comatose educational system and a disgraceful health system that has seen the President of the country spend fifty nine days in the United Kingdom taking care of his health. One can only imagine how much of the tax payers money the country is expending on the health of the President whose state of fitness still remains a secret for another “Ultimate Search”.

In addition to these discouraging realities, the country is swamped in systemic corruption that appears to have defied human understanding. Monies are stolen daily and stashed in the most unexpected quarters, yet our lawmakers are talking about amnesty for corrupt individuals. Sadly, the law enforcement agencies that are expected to prosecute corrupt officials are only engaged in a marathon without a track, so we are not even sure when and how the race will end.

Whilst the citizens are encouraged to obey the laws of the land by paying their taxes, it will be gladdening to see a government that changes its posture and disposition towards public funds. Let the new vigour on tax collection be complemented with a commitment to self-cleansing and accountability. If the country is in recession and we have to rely on borrowings and proceeds from renewed tax efforts to fund our NGN7.4 trillion budget, then the tax payers’ money should not be spent on parking a presidential jet in London Airport at the cost of £1000 daily for over fifty days, in addition to many government officials lodged in highbrow hotels, in the name of national prestige and protocols. What could be more embarrassing?

Now that a new budget has been passed and signed, it is incumbent on the government to expedite the release of funds for those projects that directly impact on the wellbeing of the citizens. This will go a long way in boosting the confidence of the people in the government and its ability to judiciously use tax payer’s money to the benefit of all.

As officials of the government, led by the Acting President, make pronouncements on tax payment and collection, it is important to create a balance by making pronouncements, matched with actions that directly benefit the people. Hence, the citizens also declare amnesty for the government to fulfil its obligations to tax payers, without which they become clever tax evaders.