Nigeria is a very rich country in terms of its GDP and by the volume of trade transactions that flows from the country every year but in terms of per capita income, Nigeria remains one of the poorest nations on earth.This is why sometimes; there could be huge economic growth with no development and lack of job creation. The rate of poverty in the land is so high that records show that over 85 percent of Nigerians live below the poverty line and the remaining 15 percent cannot be said to be rich because of the overwhelming pressure the rest of the population will heap on them, so by logical conclusion nobody could be said to be wealthy from the true sense of the word.
Taxation is a means by which government finance their expenditure by imposing charges on citizens and corporate entities. Generally, taxation is used to encourage or discourage certain economic decisions, for example reduction in taxable personal (or household) income by the amount paid as interest on home mortgage loans results in greater construction activity and generates more jobs.
All over the world, nations have developed an effective tax policy that re-distributes income so as to breach the scandalous gap between the haves and the have notes, in such rational societies the people measure the achievement of their government in terms of the enhancement of the livelihood of its middle income earners and not by the number of nonexistence roads and bridges constructed as it is known of third world countries. This is clear because development is not measured by the number of good roads and beautiful houses in your village but the quality of the life of such persons that make use of the facilities.
Nigeria as it is today has no identifiable tax policy direction (though it may exist on paper), what happens is that each succeeding government attempts to fashion out a means of survival, which ultimately croaksas soon as such government completes its term in office. The result been that Nigerians remain under-taxed, people hardly pay taxes and even if they manage to pay, it ends up in the hands of corrupts elements within the system. The irony of its all is that the higher people earn, the more they develop the connections to intimidate and bribe tax collectors in what is known as tax evasion.
On the contrary the rich should pay more taxes not because they are rich but because they earn higher than others, the logic being that if one has more than one car, he ought to pay double charges for the second car and to stop this unwanted influx of luxurious cars, aircrafts and expansive products, the government may have to increase their charges.
The above policy should also be applied to large buildings and estates that are majorly unoccupied. Also in order to control the huge amount of money charged by land lords for house rent, government should develop a formula of determining the value of an apartment within a particular area and thereafter place a price limit on them, any land lord that exceeds the price should be heavily taxed, for instance, if government places the house rent of one bedroom flat in Kubwa, for let’s say N150,000 in a year and a landlord decides to attach an extra of another N150, 000 making it N300,000, government should charge him as high as N140,000 as a punitive measure.
However, it is important to point at that the major reason why people refuse , neglect or are reluctant to pay their taxes in Nigeria is that the country had had an irresponsible and irresponsive government, the argument across Nigeria today is that it makes no sense paying tax since we provide our own security, electricity, manage our roads the way they are, pay heavy school fees for our children and wards and that even when they eventually pay the tax , it still end in the hands of corrupt elements within the structure, hence it makes no sense paying tax.
Nevertheless, now that it looks as If we have a government that is accountable (going by their utterances), Nigeria would have to strengthen its tax policy.Most countries run their economy based on an effective and efficient tax policy, Nigeria cannot be left behind especially now that the price of crude oil is depreciating.
Apart from developing a better National tax policy, the major areas, we must enhance is in the areas of effective monitoring and tax policy implementation, we have to develop some local content policy on tax collection and utilization , we have copied a lot of good policies from elsewhere that are not practicable in Nigeria. Albeit we have to key into the e-transaction paths of modern governments, where every transaction is electronically done, key players in the industry like the Banks, Federal Inland Revenue Services and the National Identity Management Agency would have to collaborate in the achievement of these objectives.
ROLAND UWAKWE O C
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