Recently, the Nigeria Governors’ Forum declared its support for the passage into law of the new tax bill presented by the presidency to the National Assembly last year. The earlier contention was to allow the Value Added Tax (VAT) to remain at 7.5 percent. This development suggests that the grey areas that previously generated debate and concerns about shortchanging certain sections of the country may have been addressed. Various opinions, including those of tax experts, have alluded to the fact that Nigeria will be better off if the new tax reform is implemented.
They believe that there would be healthy competition among the states in terms of revenue generation and development; hence, states that generate more revenue would be at liberty to enjoy better allocations from the federation account. The tax reform bill, stakeholders uphold, will modernise the economy and engender a better living standard for Nigerians. In support of this view, the Nigeria Extractive Industries Transparency Initiative (NEITI) has backed the tax reform bills, highlighting their potential to modernise Nigeria’s tax system and align with global best practices. Prior to this time, it is believed that less than 30% of Nigerians pay tax.
Another school of thought suggests that the failure of citizens to pay taxes is because the government has little to show in terms of infrastructural development, but only thrives on a quantum of corruption, usually perpetrated by the elite that feeds fat on the commonwealth—a challenge the authorities have not found an answer to. The reality is that Nigeria is grappling with a high rate of unemployment, and given the fact that there is no way people who do not have jobs could afford to pay tax. In fact, the ordinary Nigerian citizen at present views the issue of taxation skeptically, except there is something new to cheer in terms of poverty alleviation.
For example, the stampede that occurred last year, resulting in the deaths of women and children who queued for bags of rice donated by a philanthropist in Anambra State, was avoidable. Again, the latest tanker explosion, which claimed many lives in Niger State, also happened because people are hungry and would do anything to survive, even at the detriment of their own lives. That said, the financial autonomy granted to local governments by the Supreme Court last year to manage their own funds, and now the new tax reforms awaiting passage into law, is a sign of good omen. It also means that hope is on the rise and that society and the people would be lifted out of the protracted poverty and penury that have entangled the poor masses, especially in the country, for ages.
While we admit that payment of tax is a civic duty of every citizen, the government, too, is under obligation to provide job opportunities for its citizens, as well as a conducive business environment for the poor masses to thrive in their daily activities. The much-awaited tax reform regime should have something good for all and sundry. The idea of robbing Peter to pay Paul should not have a place again in our society. This will encourage many Nigerians to be faithful in the payment of taxes, going forward.
