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9 tax benefits you probably take for granted

Nigeria is blessed with 57 million economically active citizens, but the shocking truth is that only 761,000 of this number are registered to pay personal income tax. In fact, if it wasn’t for Pay As You Earn (PAYE) which is deducted at source, the majority of us would probably find a way to evade what we commonly misconstrue as the ‘tax burden.’

tax
Tax

This indifference is not without reason. We have been wrongly groomed to understand that tax is contrived by the government to make life difficult for us with undeserved cuts from the earnings we struggle to make after much hard work. But what you may not know is how much you depend on tax for your welfare when situation calls for it. Here are 10 ways taxes come to your rescue that you probably take for granted:

Shelter
If you were raised or currently reside in public housing, you may have reason to thank the taxes you or others have generated for the relative freedom you enjoy from exorbitant rent. After all, you have no reason to contend with agency, caution or other fees that your peers understand as the price they must pay for a roof over their heads.

But don’t be surprised if the government makes demands for a fraction of your income to make the same facility available to others in the short run. The National Assembly has just passed the National Housing Fund (NHF) Bill 2018 which seeks to impose a compulsory 2.5% deduction on your monthly income to secure funding for additional housing projects in the country.
Healthcare

Oftentimes, private hospitals lack the specialised skills or equipment to treat the ailments that strike when you least expect. In such cases, they refer patients to general hospitals across the federation for more specialised care. If you or yours have had occasion to receive healthcare at any public hospital to cut cost or for referral purposes, you should be a tax ambassador because some of those hospitals were built with revenue generated from taxes. Think what would have happened to you if none were just around the corner when it mattered.

Mass transit
At federal, state or local government levels, you may have been lucky to catch a bus that only cost a fraction of what you usually expect from commercial transportation during your commute to work or business. Your child probably had cheery news to share about how a big neighbourhood bus took her to school for free. It is called a mass transit system provided by the government, and don’t be surprised if it was funded with proceeds from taxes paid by you or others.

Free Education
Taxes may have come to the rescue if you are the product of a public school or federal/state university. Remember how fulfilling it was to pay as little as N25, 000 as your tertiary school fee when the parents of your counterparts in private universities literally gave an arm and a leg to meet up with tuition? The government is sometimes able to achieve a measure of subsidised education because several upstanding citizens exercise their civic duty to pay taxes. It wouldn’t hurt to join them so others can have the same story to tell. Education is a basic right, after all.

Brand Nigeria
If you are a business person dealing in locally-made products with money in your pocket by month end, you probably have taxes to thank. Government often imposes high taxes on foreign goods to encourage patronage of local products by the citizenry. This might sometimes leave you smiling to the bank when it matters.

Good Roads
Roads riddled with potholes leave us frantic and furious because they do not only damage our vehicles but are often responsible for the auto accidents that claim innocent lives on a daily basis. This explains why good roads should not be taken for granted. They are products of the taxes/alternative revenue sources, and fall into the category of social amenities we expect when the government is financially buoyant.

Job Creation
In a country with unemployment figures pegged at 23.1%, it is a privilege to be part of the gainfully employed workforce. But what you may not know is that job creation sometimes depends a lot on taxation. Case in point, your organisation may have been priced out of the market without tax waivers or holidays granted by the government to encourage investments and business growth, depending on the industry that engages you. Thinking about this should encourage you to pay your taxes.

Income Redistribution
Tax helps ensure social justice in the sense that it is pegged at a particular percentage of income, not a specific fee. As such, it creates a level playing field for all because the higher your income, the higher the tax margin deducted and vice versa.

Nigeria, others lose $200bn per annum to unfair global corporate tax system —IMF

 

 

Security
Just about every one of us would prefer to live and work in secure neighbourhoods. In fact, we have reservations with the response time of the Nigerian police force because we want them available round the clock for crime-fighting and other purposes. But keep in mind that your tax is one source of remuneration for the cops. As such, prioritising tax payment is one sure way of keeping them motivated so they will be better placed to perform their statutory duties when situation calls for it.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.