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Taxation and representation in a dog-eat-dog society

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By Tabia Princewill

Taxation
taxation symbol

FIFTH columnists manipulate conversations around government policies and misdirect the conversation. Assuredly, criticizing government is every citizen’s right.

Yet, criticism in Nigeria sometimes turns into misguided resistance led by sections of the population who benefit from opacity and chaos, people who refuse reforms because they run counter to their personal interest: without dysfunction they cannot continue with the illegal acts guaranteeing their way of life.

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The Finance Bill recently passed by the National Assembly states that every Nigerian will have to produce his or her Tax Identification Number, TIN, in order to use an existing bank account or to open a new one. This was seen as a new way of complexifying Nigerians’ already stressful lives: policy engagement is still a nascent field in Nigeria, where the media would much rather discuss politics than break down the effects of policy or the reasoning behind it.

Policy engagement

Simply put, the TIN is the official confirmation that one is a registered tax payer. In a country still struggling to meet its tax targets, where only 19 million people (out of nearly 200 million) pay taxes, one should understand the urgent need to not only identify tax dodgers but to widen the net thus bringing more revenue into government coffers.

Indeed, every taxable person in Nigeria, that is, everyone who earns an income or receives one, irrespective of their age, should have a TIN, including non-Nigerians living and working in Nigeria.

Although according to the Federal Inland Revenue Service, FIRS, the number of tax payers doubled since 2015 (only 10 million Nigerians paid taxes prior to this date), government expenditure also increased: schools, roads and other infrastructure cost money. With low oil prices (gone are the wasted boom years) widening the tax net is a matter of critical urgency in order to avert a fiscal crisis.

In Nigeria, profit making is almost entirely based on skirting the rules or individuals gaining the most out of privatising their access to our commonwealth while repaying next to nothing to support the wider society: the TIN number like the Bank Verification Number, BVN, will surely aid the fight against corruption as well as boost government revenue.

Money laundering and fraud prosper in Nigeria because of lax financial regulation and the difficulty behind identifying the real owners of illicit wealth. Too many companies have business models precariously built on a small mountain of illegalities.

Yet, their owners receive “man of the year” awards and other accolades, when their so-called acumen is only the result of consistent rule breaking and impunity.

Ours is a dog-eat-dog society where the best is he (or she) who can get away with making the most amount of money on the backs of the most amount of people while expending the least effort possible and providing mediocre services at best.

For those wondering why we need so many different identification numbers (the TIN, the BVN and the NIN, National Identification Number), the focus shouldn’t be on the variety of these numbers which serve different yet linked purposes but rather on government’s capacity to marry all this data, to keep it safe and to keep track of it. Will the various agencies responsible for these numbers coordinate their efforts, thus fighting crime, enabling better tracking of our taxes (and, therefore, future government resources) and more generally, enabling the provision of better services for all Nigerians?

In the United States, a person’s taxpayer identification number includes their Social Security Number, SSN, given to all citizens and an Employer Identification Number, EIN, which is given to employers of labour.

All taxpayers are required to state their TIN (SSN, EIN) on all tax returns they file. It is a shame Nigeria has no institutionalized welfare or social security system beyond this government’s recent social investment programmes.

Ideally, every single Nigerian man, woman and child should have a social security number and be free to claim, at one time or another, should the need arise, benefits from the government which are funded by our taxes. All of this government infrastructure is 30 or 40 years overdue.

During the oil boom, we should have laid the foundation for such public services as power, transport, road and rail networks, health services etc. Today’s conversation should be about improving these industries rather than building them from scratch.

The oil boom had a deleterious effect on our psyche: successive governments felt they had too much money to play with (and to loot) and citizens felt we needn’t pay taxes because government subsidies could cover everything, forgetting government funds should also come from the productivity of its people in the form of taxes. Today, both state funded schools and hospitals have collapsed and we have neither oil wealth nor taxpayer funds to rescue them.

Material ientive

We create all sorts of excuses not to do the right thing: we don’t pay taxes because we claim these funds will be looted, forgetting that without taxation, we cannot expect proper or adequate representation by our government.

Beyond voting, it is the everyday actions we take that create a real link between ourselves, the citizens, and those we elect to lead us. The reason why Americans, or the French, British etc. take an active interest in politics is because they want to know how their taxes are being applied.

It’s a very real, material incentive to pay attention to government’s plans and activities, outside of the romanticism of democratic ideals.

The need to link taxation with adequate representation was one of the reasons for the American war of independence: America, a British colony at the time, felt it shouldn’t be taxed if it wasn’t going to receive any benefits.

We encourage and allow corruption by divorcing ourselves from our role as citizens which is to scrutinise government’s efficient utilisation of our resources. But why would anyone bother to check government spending if the funds don’t originate from our pocket in the first place?

Sexual offenders register

NIGERIA finally has a “Sex Offenders Register”, launched by the National Agency for the Prohibition of Trafficking in Persons, NAPTIP. Data-management systems are critical in a country such as Nigeria where it is so easy to change identities or to simply move from one house address to another, or one state to another to evade prosecution for a crime.

Vice-President, Prof. Yemi Osinbajo said during the launch: “while we must ensure that abusers are identified and punished, the greater part of our efforts should go into ensuring that we do all in our power to prevent the abuse from happening in the first place, by proactively identifying risk factors and intervening decisively to deal with them before abuse happens; challenging demeaning or degrading references to women; opposing a culture of blaming victims; teaching boys a sense of masculinity that respects women and accepts no type of gender based violence and if you witness a sexual assault, call the police or contact the sexual and gender based violence response team in your state.”

There should be laws and policies tackling every facet of what the vice-president highlighted: teaching boys to respect women should be part of civic education, the National Broadcasting Commission should watch out for media forms which degrade women and the National Orientation Agency should embark on campaigns to educate Nigerians on gender issues.

The law should force all states to have a domestic and sexual violence desk. Unfortunately, there isn’t enough inter-agency cooperation to allow reforms to really take root.

Open treasury portal

THE Federal Government recently launched the Open Treasury Portal but the media preferred to focus on what politicians lost (or gained) jobs.

The Executive Secretary, Nigeria Extractive Industries Transparency Initiative, Mr Waziri Adio said: “all Ministries, Departments and Agencies are to publish daily reports of payments from N5m; monthly budget performance; quarterly financial statements; and annual financial statements.”

He also stated the Accountant-General of the Federation would publish funds received and paid out from government coffers. To become a part of our culture reforms should become laws.

Vanguard

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