How taxpayers can develop Nigeria

Kemi-Adeosun-Minister-for-Finance (1)

 

Globally, taxpayers are drivers of national development. It is easier to find riverheads without water than to find robust public coffers without a dynamic pool of taxpayers. Taxpayers are the economic backbones and moral voice of nations. They play leading roles in the processes of public policy formulation, and implementation. But this is not exactly the case in Nigeria.

Many Nigerians do not have rosy ideas about tax. They do not see the connection between tax compliance and national development. This is not peculiar to Nigerians. For, Winston Churchill once noted that: “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Historically, tax is a thorny subject in Nigeria. It was the primary trigger of the Aba Women’s Riots of 1929. There were widespread grievances against colonial administrators and their cronies. These grievances were constructively harnessed to foster social changes when the plan to impose special taxes on the Igbo market women was announced. The enterprising women were afraid that the tax will stifle business growth and gravely upset “the supply of food and non-perishable goods.” Hence, they mobilized are resisted the efforts which they considered oppressive.

One truth that comes to the fore from the Aba Women’s riot is that tax has a way of awakening the spirit of nonpartisan activism among the masses, which is vital to good governance. Government cannot effectively deliver people-oriented development when the populaces are not in tune with socioeconomic and political realities. Taxpaying enables the citizenry to see themselves as strategic stakeholders in the enterprise of national development. This is true particularly when the tax system is not burdensome, or reinforces the sentiment of Mark Twain: “What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin”

Often, the poor are victims of tax injustice. It is uplifting that one of the goals of the National Tax Policy Implementation Committee (NTPIC) is to ensure tax justice in Nigeria. Attaining tax justice is crucial to the moral and material development of Nigeria. The moral foundation of great nations become weak and prone to collapse when those who have not enough and those who have just enough comparatively pay tax more than those who have more than enough. That is why having a doable proposal of equitable tax reform often spells electoral victory in advanced economies. Equitable tax regimes are formulated to redistribute wealth, narrow iniquitous income gaps, and thereby, bridge unreasonable inequalities in living conditions.

It is important for us to remind ourselves that developing a national culture of tax compliance cannot be legislated into existence. It begins with educating economic actors about the desirability of paying tax, and more, demonstrating that taxpayers’ monies are sacrosanct. Widespread venalities have eroded public confidence in government and the political class. Clearly, this affects people’s disposition to tax.   It is reasonable to hope that as corruption in the public sector keeps dwindling and good governance becomes guaranteed; Nigerians will become more enthusiastic about paying their tax promptly and correctly.

Prodigious public spending without the input of taxpayers is a myth. The beneficent practice of taxpaying fosters genuine scales of priority. The true need of the people is almost always at variance with that of the political class. Taxpayers have ways of pressuring policymakers to ensure that government’s priority aligns with that of the people.

One of the indirect benefits of widespread tax compliance is that it stimulates prudent public spending. It strengthens the systems of accountability and transparency. Opacity is a mark of public spending in Nigeria, because many citizens are not taxpayers, and so, they do not see public funds as their own.

Ronald Reagan once noted that, “government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

In Nigeria this is not really the case, when it stops moving, government allows it to die. Cronyism fuels the politics of subsidy in Nigeria, not the possibility of economic growth. As we are reforming extant tax laws and regimes, we should also look into sectors of our national economy that have high growth potential, but are currently struggling. We should evolve subsidy schemes for such sectors with the hope that they will drive future economic development.