Why Nigerians no longer
want to pay tax (1)
By Hassan Gimba
There is this hullabaloo
that has enveloped the country, with debates all over, in some instances
threatening to degenerate into fisticuffs. It is all about the Tax Reform
Bills.
Even though, after all is
said and done, it may end up as an issue that signifies nothing but being blown
out of proportion, it made me recall Macbeth’s speech in William
Shakespeare’s Macbeth.
In his speech, he
surmised that there is no meaning or purpose in life. Understandably, with his
wife dead and armies marching against him, he came face to face with the
transience of life. He visualised his life following a “way to dusty death” and
likened life to a candle flame.
To Macbeth, “Life is but
a walking shadow; a poor player that struts and frets his hour upon the stage,
and then is heard no more: it is a tale told by an idiot, full of sound and
fury, signifying nothing.”
We may not say the Tax
Reform Bill is a tale full of sound and fury but when considered from the
submission of the Revenue Mobilisation Allocation and Fiscal Commission
(RMAFC), the whole idea does not signify anything; it may amount to nothing.
But that is if we are truly practising constitutional democracy and desirous of
adhering to it.
In a 2470-word
memorandum, the RMAFC buttressed the fact that tax reforms are good for the
overall interest of the country’s economy but pointed at complexities in
determining tax by derivation as “VAT is a tax levied on the consumption of
goods and services. The final tax burden falls on the consumer, and the tax is
remitted by businesses (agents of VAT collection) to the tax authorities. The
complexity in determining the taxpayer’s “residence” for derivation
purposes arises when goods are purchased in one location and consumed in
another, the seller and buyer operate across state boundaries, and VAT
reporting systems do not track the end-use location effectively.”
The memorandum gave an
example: “A Man from Kano Buys a Fuel Pump in Lagos for Use in Kano State.”
Most importantly, the
memorandum reminded us that Section 162 (2) of the 1999 Constitution of the
Federal Republic of Nigeria (as amended) empowered the RMAFC to determine the
formula for the equitable sharing of revenue among the three tiers of
government and to ensure that such formula reflects the principles of fairness
and justice. It then asserted that the Constitution conferred on the
RMAFC the sole power to mediate in matters of revenue allocation for the three
tiers of government.
Paragraph 10.2 of the
memorandum warned that “The Constitution, being supreme, does not envisage that
any other Act of Parliament such as the VAT Act could assume this
responsibility. Any such attempt would contravene the Constitution. Therefore,
the RMAFC remains the sole arbiter in producing allocation formulae that are
fair and equitable for the three tiers of government. Any deviation from a
formula crafted by the RMAFC risks violating constitutional provisions and
undermining the Commission’s role as the impartial arbiter of revenue
allocation in Nigeria.”
Sometimes, you wonder what
our lawmakers know. Many have been in the National Assembly more than once,
including the Senate President, his deputy and principal officers. Yet they
were at each other’s neck on an issue they had no right to legislate. Even
those against the bills were not doing so because of their knowledge that it
was not their turf as lawmakers. Sad, isn’t it?
Nonetheless,
we will say the little we can about the issue, hoping it will contribute to the
debate on tax reform.
In the first place, why
should a Nigerian, especially a Northerner, raise the muscles of his neck over
any tax for that matter, considering that it is in the tradition of the
Northern system of government, which even the colonialists met, to pay tax?
Not only that, there was
a time when northerners and, of course, most Nigerians willingly gave, not even
paid, tax. Sometimes, payments are deducted from the source, which means that
the payee had no choice but to see the money, in this context, deducted.
A story was told of how,
in the 50s, northerners willingly taxed themselves and gave the proceeds for
the education of their sons in the United Kingdom, then the focal point for
education. It was said that northerners were made to contribute one penny each,
and they did so happily. That story may or may not be the whole truth but it is
an indication of what trust can do – to make people give taxes out of their own
volition. Two of those who benefited were Doctor Bukar Shuaib and AJKG Imam.
Dr Bukar Shuaibu, CFR,
born in 1927 in Geidam in the old Borno Province (now Yobe State), attended
Elementary and Middle School, now Government College Maiduguri, before
proceeding to Barewa College between 1934 and 1948. He was at Liverpool
University from 1949 to 1954 where he obtained a Bachelor’s Degree in
Veterinary Medicine. A member of the Royal College of Veterinary Surgeons, he
was the first Northerner and Nigerian to achieve this feat. He later attended
Edinburgh University and obtained a diploma in Tropical Veterinary Medicine
Between 1957 and 1958.
Alkali Jafar Kalli Goni
Imam, popularly called AJKG Imam, or Malam Kalli, was the first Kanuri and
northerner to be sent to the United Kingdom for a full degree course in
Forestry. While there, he attended Aberdeen University in Scotland and
graduated with a BSc in Forestry, also in the fifties. Born in 1928 at
Benisheik, where his father was on posting as a staff of the Borno Native
Authority, he came from the illustrious Imam Family.
There is no doubt that
trust was the main determiner in making earlier citizens pay taxes willingly.
There was trust in the leadership of the day and the knowledge that the taxes
collected would not be misappropriated. Now, even…
To be
continued.
Hassan
Gimba, anipr, is the publisher and CEO of Neptune Prime.
