If Nigeria is interested in raising her revenues… (II)
My prediction is that the Buhari government will blink first on the matter of VAIDS and it has. It’s very unfortunate that the General has become the worst kind of politician. He is now looking for a second tenure and everything can be sacrificed. As I predicted, these ‘bog boys’ will make sure he forgets […]
My prediction is that the Buhari government will blink first on the matter of VAIDS and it has. It’s very unfortunate that the General has become the worst kind of politician. He is now looking for a second tenure and everything can be sacrificed. As I predicted, these ‘bog boys’ will make sure he forgets the idea. In my own books, we are too premature, too careless, too disconnected, too uneducated in tax issues, to have launched a voluntary declaration scheme. And those in government too, they don’t seem to know that we on the outside are watching the way they spend our taxes and we don’t like it one bit. Anyway, let us complete the logic from last week.
The ‘do-you-know-who-i-am’ phenomenon is what has killed us. In London, you will have to pay about 10 pounds just to drive through the ‘city’ and other posh places on a daily basis. That is like charging people for driving to Ikoyi, VI, Maitama and so on. It is these fees that make people respect themselves, and the government. It is the fee that creates the semblance of an organized society. In Nigeria, people don’t respect anybody, not even the government. And the government does not respect itself, or the people. Impunity reigns. Are we ready to reverse this? Do we even know what it would take? Are we ready yet to jettison our feudal mentality of superiors and serfs and transit to the modern age?
Then let me take one aspect of Bill Gates’s discussion with Nigeria’s leaders during his recent visit; the aspect dealing with revenues. Gates said Nigeria featured the lowest Revenue to GDOP ratios in the world, at 6%. The other country with low revenue to GDP is Bangaldesh, at 10%. One of the richest men in the world advised that if only we could ramp up our revenue ratio to the level of Bangladesh, we could be adding $18billion to our yearly budget. Very interesting. I had been writing about our dismal, unimaginative, and hypnotically underachieving budget in the past weeks. At a mere $133 per person, Nigeria has undoubtedly the lowest national budget per capita in the world. Even though those in government like to boast of their N1.3trillion spend on infrastructure in 2017 the simple fact is that we all went to sleep and all stopped thinking. That is why a $23billion budget for 180million people is looking like an achievement, even though half of it will be embezzled. I have no doubt we should be doing at least double that – if only those who should, would release Nigeria’s revenues that is stuck in their pockets – the fines, the fees, the duties, the rates, the proceeds of natural resources. I am repeating these for emphasis. Nigeria seems to be a country created just to be looted. I went in search of Bangladesh’s 2018 national budget. They are 150million people. Their 2018 budget is $50billion, more than double Nigeria’s. Who did we offend?
So, if Nigeria is really ready to increase its revenue (again the focus should be on revenue not taxes), these are what the people in government must do or think about. I will put them in the form of questions.
1. How do you spend the taxes? If they continue to spend our taxes to make themselves comfortable then the attempt to pursue business people post-VAIDS is going to meet with rebellion. I am not sure Buhari is up to a modern day equivalent of an Aba Women’s or Agbekoya riots. The way government officials revel in luxury at the expense of businesses these days is just mind-boggling. No business person or ordinary citizen in Nigeria is happy to continue funding these luxuries with their sweat and blood.
2. Why aren’t you thinking of other income sources apart from taxes? I have explained this above. We must get all our revenues wherever they may be. In some cases, it may be much easier and more optimal with salutary effects on the economy to get other forms of revenues than heat up the policy on tax issues. I have been where tax officers talk of taxing artisans, or those who are obviously struggling. Recovering our 400,000 barrels of crude daily is a better quest in my view.
3. Are you ready to pay and collect from the ‘big men’ in society? – The government needn’t be harassing every Nigerian. We know who gets the money. But are they ready to go after the big people? Have they ever tried? If that can be done, then the rest will follow. Are we ready to follow the money? For instance, if government installs a toll gate, they often allow people with long convoys and sirens to go for free while ordinary citizens pay.
4. Are you transparent yourself? It’s pretty simple. In other countries with our kind of problem of low revenue, government officials will live by example. The minister and chairman of inland revenue should by now be coming out clean with what they earn and how much they pay as taxes. Yes, their tax clearance certificates should be in the open; even that of the president. That is the best assurance to the public. Alas, since Buhari himself ran away from transparency, all his lieutenants have also taken advantage. Too bad.
5. Do you still have untouchables? Can you follow the money? I once asked a bunch of inland revenue professionals the other day if they were ready to follow the money. I found out that they were afraid of confronting religious houses even when such places obviously had commercial operations making much money. I concluded they weren’t ready for serious business. To grow revenue you must be ready to follow the money. In a place like Nigeria where a lot of money goes into spiritual stuff, you have to follow the money there and extract your taxes, rates, duties, fees and whatnot. The taxman should be fearless.
6. Will your sanctions be politically-biased? There is a need to find out if the enforcement of the tax evasion rules will be skewed against opposition party members. We haven’t seen anything yet that shows that this government is ready to prosecute any of its friends. We have seen a revival of corruption cases against members of PDP – whom the government still considers as formidable – but not against former PDP members who are now in APC. To be seen as serious in raising revenue levels, your fight must be fair, just and robust.
7. Does the government have the will, in an election year? Imagine the tactics adopted for collection of taxes in Nigeria; all that gun toting by mobile policemen to go lock up people’s businesses, all the harassment and detention involved in enforcing taxes. A Buhari that is desperate to come back in 2019 will not dare cause such ruckus and the concomitant political backlash. But we shall wait and see. I think after this initial postponement of the deadline, the idea is totally dead on arrival. The government will just let it die.