9 November 2009
editorial
Abuja — Since the advent of oil boom in Nigeria, governments have been lax in collecting taxes from citizens, corporate bodies and organisations to fund their programmes.
This apparent laxity means that the country runs its affairs largely outside the income tax system. There is today a generation of citizens that does not know what taxes are all about.
Nigeria is thus a de facto tax haven and many giant multi-national corporations which do business in the country and declare yearly profits in billions of dollars are on a virtual tax holiday. Other multinationals can easily obtain tax exemptions with the intervention of corrupt government officials. The only people who really get to pay their tax are employees in the public and the formal sectors of the economy. These ones really have no choice as their taxes are deducted at source from their salaries and wages.
That source of fund which comes via the Federation Account requires little or no effort or creativity to collect. The money is just there for the picking every month almost on a platter. And many officials duly collect theirs at the end of each month.
Surely, if governments compel citizens to fulfil their basic civil responsibility of contributing to the polity through payment of tax, many will be emboldened to join in the anti-corruption fight and in the fight.
It is in light of this reality that we note the efforts by the Federal Inland Revenue Service (FIRS) in getting Nigerians and corporate organisations to pay their tax as a way to shore up government revenues and as a gentle reminder of the responsibility of the citizen, corporate and individual, to the sustenance of the state. In the past few years, there has been a noticeable dynamism on the part of the FIRS to persuade and, sometimes, cajole citizens and organisations to pay their tax as and when due. Unlike many public organisations or agencies, the FIRS has been alive to its responsibility, by being creatively proactive in propagating the tax message to people and organisations. On a number of occasions the agency has had to seal companies which have defaulted in paying their tax. It does not spare even government ministries, departments and agencies.
This is how things should be. For without tax, governments cannot have the funds they need to transform our society by providing vital infrastructure, education, health, good roads, etc. Moreover, citizens must be made to realize that they have a civic obligation to pay tax for the maintenance of all these. This is also what entitles them in the social contract to demand that they be governed well.
However for the current tax drive to be effective, the various levels of government should prove to Nigerians that the tax they pay is used to improve their lives. There can be no more powerful disincentive to paying tax than the citizen to see his civic duty being squandered by unscrupulous persons.
It is particularly disheartening to note that in the course of its tax drive the FIRS recently discovered that some government ministries, departments and agencies which deduct tax at source from staff salaries often fail to remit the deductions to the tax agency. This is a criminal breach of trust that should have been taken up by the prosecuting authorities.
To be able to gain full hearted support for its tax drive, the FIRS, under the leadership of Mrs. Ifueko Omoigui-Okauru, must show that it is itself transparent and accountable by remitting what it gets to the Federation Account as required by law.
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