WHY NIGERIANS SHOULD NOT PAY TAX
by Madaki O. Ameh
INTRODUCTION:
The evolution of the Nation-State in pre-historic times brought with
it some attributes, which was designed by early thinkers to make it
easier for the State authorities to carry on its assigned roles in
society. As the citizens of the Nation-State subdued their individual
rights to that of organised civil society where they agreed to be
governed by uniform rules and regulations of human conduct, and also
confer on the State some rights to sanction deviant behaviour, the
modern day society as we know it today gradually evolved from the “Hobbestian
state of nature”, where life was nasty, brutish and short, and
might was right.
One of the mechanisms through which the State, not being itself
engaged in any income generating ventures, was expected to generate
resources with which to provide for the common good of all, was to
take a little of that income which accrued to individuals, and create
a pool of funds from which common amenities like security, roads,
utilities, schools, healthcare, etc., could be provided. Thus evolved
the concept of taxation, as we know it today. From humble beginnings
when taxation was no more than 5% of average income of individuals,
the appetite of the State to more funds grew as the needs of society
became more complex. Different taxes and levies started being imposed
on individuals and corporate organisations, and what initially started
as a voluntary contribution to the State gradually assumed a
compulsive nature, such that laws were made to punish evasion of taxes
by different governments.
To date, the average direct tax rate the world over is 30% of earned
income, with variations from country to country. Tax relief became a
tool of manipulation and political campaigns at election times. The
governments which promised the most tax relief were more favoured by
the citizenry, who often paid taxes under duress, obviously having
better things to do with their incomes than handing it over to a bogus
apparatus called the State, as they were not always able to tell the
direct benefits they obtained from the government for payment of those
taxes.
The level of resistance to taxation in different places differs in
degree and complexity. Whereas citizens of most underdeveloped and
developing countries rely on the non availability of population and
income data in the hands of the taxing authorities to evade taxes,
thereby leaving the burden of taxation to be borne by a few in regular
employment, in the more advanced and sophisticated economies, people
rely on the services of tax planners and other experts to cleverly
avoid tax through lawfully recognised means. One common feature in
resistance to taxation is however the perception of the populace
towards their governments in the area of effectiveness in meeting
their common needs. In areas where the governments are perceived to
be up and doing, and people can visibly assess the impact of
government on their daily lives, governments have been more able to
rely on taxes as a major chunk of their national income than other
places where governments are perceived as non-performing.
It must however be borne in mind that the basic justification of the
state in collection of taxes remains the need to raise funds to
provide amenities for the common good. Where those amenities are
either lacking completely, or where they exist, are largely provided
by the citizens themselves without any input from government, then the
moral or legal right of the State to impose such taxes becomes
suspect.
This paper attempts to examine the various facets of life in Nigeria
from the point of view of the respective obligations of the citizens
to pay their taxes, and the duty of the State to provide amenities,
and comes to the inevitable conclusion that nowhere in the world is
there a better justification for evasion of taxes than in Nigeria, as
the governments here have done little or nothing to deserve any form
of contribution from the citizens by way of taxes. That being so, the
paper advocates a well articulated and structured resistance to
taxation, especially by workers in the oil and gas industry in the
country, who are undoubtedly the most unjustly taxed sector of the
Nigerian economy.
For the purpose of this paper, the amenities legitimately expected
from Government can be classified into Personal Security, Roads,
Public Utilities, Schools, Social Security, Medicare, Housing, and a
general enabling environment for economic and social activities to
thrive, as would be expected of any civilised human setting. These
different aspects will be discussed in turn, to establish that in all
these areas, successive Nigerian governments have failed woefully in
its social contract with the citizenry, and that any form of taxation
in Nigeria is unjustified and amounts to blatant stealing by
government.
PERSONAL SECURITY
It
is a generally accepted fact that Nigeria is a very insecure place to
live in. Crimes are committed against decent and law-abiding citizens
on a regular and routine basis, and there are no effective avenues to
redress those wrongs. The sense of insecurity pervades the living
pattern of the people, and reflects even in the way they build their
houses. Unlike most places in the developed world or other saner
environments in neighbouring African countries where people just build
their houses without needing to erect fences, in Nigeria, when one
thinks of building a house, the first thing that comes to mind is
putting up a high fence. Apart from helping you to secure the land
from encroachment, which in itself is a criminal offence, the high
fence gives a feeling of obtaining at least a temporary reprieve in
the event of an attack by hoodlums, which is sure to come. Thus, in
many cases, the fences are higher than the houses themselves, giving
the feeling of living in prison.
Even after those fences are erected and the houses are built, they
have to be fortified with burglary proofs, which pose a real hazard in
the event of fire. Entire families have been known to roast to death
in such houses, but because of the pervading feeling of insecurity in
the land, there is hardly any house in Nigeria which does not have
re-enforced burglary proofs, with all the added costs.
The Police recognised the world over, as friends of civil society,
are the exact opposite in Nigeria. Distress calls are never answered
at all or when they are, the response is often long after the damage
has been done. Excuses ranging from lack of vehicles, to personnel,
to ammunitions and communication gadgets, to mention a few, are
routinely relied on by the Police for their non-performance. To at
least provide some reprieve, those who can afford to, resort to hiring
the services of private security men who come in different forms and
names, from the uniformed ones attached to private security companies,
to the less sophisticated but sometimes more effective maiguards.
At the end of the month, these persons have to be paid from the after
tax income of the citizen, thereby further reducing his purchasing
power. In an environment where everyone is up and doing, there would
be no need for the individual to be put to the extra expense of
providing his own security, as such roles properly belong to the
State. But alas, not in Nigeria.
Even when crimes are committed, the lack-lustre attitude of the Police
to investigation and prosecution of the offenders leaves so much to be
desired, and even emboldens prospective criminals. The rate of
success in criminal prosecution in Nigeria is abysmally low, as the
Police, not being interested in the prosecution process, usually
abandons it midway, leading to the escape of known criminals from
justice. But for the total lack of crime data in Nigeria, the country
could easily pass as the one with the highest number of unsolved
crimes in the world! People are murdered daily and their corpses left
on the roads to decay and disappear into the dust, often in very close
vicinities to Police checkpoints where they perpetually stop to
collect bribes from law-abiding but helpless citizens.
The state of insecurity and decay is so much that most Nigerians have
resigned to their fates and come to realise that as far as their
personal security and safety of their lives is concerned, they are
entirely on their own. Meanwhile, bogus budgetary votes are made
yearly for security agencies, but the impact is not felt anywhere.
The only time heinous crimes attract attention is when prominent
Nigerians are involved. Even then, the outcry lasts only for a few
days, and pales into insignificance as the days go by and other more
important news takes their place. As soon as the public outcry
disappears, the interest of the Police in the case also disappears,
often after parading some people they allege to be the suspects, which
most people know to be false! To date, the brutal murder, in his own
house, of the former Chief Law Officer of the country, Chief Bola Ige,
remains a subject of politicking, with one of the principal suspects
having been sworn in as a serving Senator of the Federal Republic of
Nigeria, having won his election while in detention for the offence of
murder! That feat is almost certainly a world first, and a sure
material for the Guinness Book of Records!
The Police checkpoints which have sprung up everywhere, as a show of
government effort at providing security, has more often than not,
served as avenues for brutalisation of Nigerians. It is a known fact
that in spite of the much touted and sermonised anti-corruption
posture of the present Nigerian government, the country remains one of
the most corrupt in the world, with Policemen openly extorting money
from citizens on the roads, with the threat of being shot with guns
purchased with taxpayers money, should they be bold enough to refuse.
Demands for all imaginary manner of documents and “particulars” are
used as the guise for extortion by the Police, thereby making road
travel within Nigeria a major nightmare. Meanwhile, the criminals,
who are all well known to the Police, roam the streets and hold the
people to ransome, whereas the law-abiding citizens live in perpetual
fear of the Police, who are forever able to come up with all manner of
mischievous guises to deny them their legitimate rights to liberty.
Extra judicial murders are rampant in Nigeria, even in the so-called
democratic dispensation. Innocent citizens who dare to stand up to
the extortionist tendencies of the Nigerian Police, are routinely
arrested and detained on trumped up charges. It is not unusual for
such people to be shot dead while in detention, and be branded armed
robbers who were killed in a shoot out with the Police! Even when
that happens and there is public outcry, as is sometimes reported in
the papers, there is never any investigation conducted to ascertain
the truth or otherwise of the story. The Police carries on with
business as usual, and terrorises the citizenry at will!
It is possible to go on and on, but suffice it to say that life, not
really having progressed from the Hobbestian state of nature in
Nigeria, there is no justification on the part of any government to
demand and collect any taxes from Nigerians for provision of an
amenity like security, which is clearly non-existent at the moment, or
grossly inadequate.
ROADS
Another
aspect of public infrastructure which governments are expected to
provide in the civilised world, are motorable roads. Roads link
different places to each other and facilitate commerce, social
interaction and the wellbeing of the citizenry. In times of
emergency, roads are also used to access areas of distress to bring
help and succour to distressed people.
In Nigeria, due to the largely unplanned nature of most settlements,
there are no roads, or where they exist, they are mere death traps and
tracks created by the residents to be able to get to their places of
abode, no matter how miserable the process may be. In Rivers State
where I live, work and pay my taxes, there are hardly any roads of
note in the entire place. Even where the few tarred roads exist,
there are no drains, so whenever it rains, the whole place is flooded,
with residents practically needing canoes and flying boats to get by!
When this occurs along major tarred roads, one wonders what the fate
of those who live in other places with untarred roads would be. The
houses are flooded, and people live under sub-human conditions, amidst
captivating government propaganda that all the problems of the people
have been solved! The situation is not any better in other parts of
the country.
To ameliorate their suffering, it is not unusual for residents to
come together and contribute money to construct their roads, and at
least provide access to their houses. Due to the swampy terrain of
most areas, such exercises are usually very expensive but ineffective,
as the next major rain is sure to wash away such roads and return the
people to their erstwhile misery. The funds contributed for such
community development efforts in the face of government neglect are
not tax deductible, thereby further reducing the disposable income of
the taxpayer on a service, which the government has already been paid
through taxes to provide.
PUBLIC
UTILITIES
This comprises of electricity,
potable water, sewage and refuse disposal systems. There is no doubt
that these amenities, which are largely taken for granted in other
places, are hardly in existence in Nigeria.
Electricity supply in Nigeria has been as epileptic as it can ever
be. Most of the country is still not connected to the National grid.
In the few towns and cities which enjoy this facility, the service is
more often than not, never available. Governments have, from time to
time, paid lip service to improving the availability of electricity,
and recognised the fact that genuine development will continue to
elude the county as long as power remains epileptic. Different
deadlines have been set by the government to provide stable power.
The last of those deadlines, announced by President Obasanjo himself
on National television, was 31st December 2001. Almost two
years since that deadline expired, Nigerians have continued to witness
more epileptic power supply, even as so much money has been squandered
on the National Electric Power Authority (NEPA), which is generally
recognised as a haven of official corruption. Electric transformers
bought by government to aid in electricity distribution are routinely
sold to individuals and residents of layouts, and the monies shared by
NEPA officials. Residents of areas who genuinely need these
transformers are denied their installation, unless they comply with
the demands of NEPA officials and pay huge sums of money to them.
When they have to comply, such payments are not tax deductible and
further impoverishes the taxpayer and reduces his purchasing power on
an item the government should legitimately provide.
In the
meantime, individuals are forced, due to the epileptic nature of power
supply, to spend huge sums of money on generators. Apart from the
initial cost of purchasing the sets, the cost of maintenance and
fuelling, especially in the never ending regime of fuel price increase
and black marketeering in Nigeria, further serves to impoverish the
taxpayer.
As for
potable water, the story is even a more sorry one. Unlike most places
in the civilised world where public water works exist and are taken
for granted, in Nigeria, plans for house construction are never
complete without provision for a private borehole. Any attempt to
overlook this very important item will result in dreadful
consequences, as there will be no water to take care of basic needs in
the house. And to rub salt in an already sore injury, some Local
Governments go about demanding payment for private water borehole
licenses, when the failure of government to provide this all-important
natural resource is responsible for people embarking on the needless
expense of providing private boreholes for themselves!
Sewage and
refuse disposal systems are also non-existent in Nigeria, even though
these are legitimately within the purview of government to provide.
Every house has to have its private septic tanks, and the cost of
regular dislodgement is borne by the individual residents. The same
goes for refuse disposal systems. Failure to make private
arrangements, at own costs, for these items means that the residents
are on their own, and will therefore bear the consequences of any
ailments that arise as a result, including the cost of Medicare. In
other civilised countries where the government is alive to its
responsibilities to the citizens, integrated sewage systems are
provided, and run by the state as part of public utilities.
SCHOOLS
Education
is recognised the world over as a veritable tool for economic, social
and political advancement of the people. Since the discovery of
education in its modern form, responsible governments the world over
have invested heavily in this invaluable resource, as the only sure
way to salvage their peoples from the trappings of poverty, ignorance,
and want. No amount of funding and efforts is seen to be too great in
this area, since the benefit to society at large is immense. In many
counties, education is either absolutely free, or heavily subsidised
by the government. Expenditure properly incurred in the education of
one’s children and wards is treated as tax-deductible, to encourage
people to give their children the very best education possible, in the
sure realisation that the larger society stands to benefit immensely
from it.
However, in
Nigeria, the story is entirely different. Everyone is on their own as
far as education is concerned. The few available public schools are
never known to have functioned well in a long time. Instead of things
improving with time, the Nigerian educational system has deteriorated
over time. The schools are poorly equipped; teachers are very poorly
motivated, and are hardly paid their salaries in time, if at all. The
popular saying in Nigeria is that the reward of teachers is in heaven,
after they would have long died from starvation on earth! Successive
governments have paid little or no attention to education, thereby
leaving majority of Nigerians ignorant and illiterate, with no hope in
sight.
Schools are
closed most of the time because the teachers are embarking on one
strike action or the other to press home demands for something as
basic in other places, as salaries, wages, allowances, and teaching
aids! And the government officials are not bothered because most of
their children are not affected, since they can afford to send them to
expensive Ivy League schools outside the shores of this country on
funds stolen from the public purse!
It has also
been argued in some quarters that the neglect of education in Nigeria
is a deliberate design by government officials to ensure that the
people are kept in the dark, so that only their own children and
relations will be equipped with the requisite knowledge capital to
take over from them when they die off in old age!
As a result
of government neglect of education, private schools have sprung up
everywhere, some of them with suspect practices and curricula. Due to
near total absence of supervision to ensure that standards are
maintained, these schools are allowed to carry on the way they please,
but the parents have no option than patronise the schools, because the
public schools are non-existent.
The school
fees charged by the private schools, starting from the pre-nursery
schools to the few private universities, are at best embarrassing, and
bear no relationship to the services rendered to students in these
schools. The average school fees in a private Nursery/Primary school
in Port Harcourt which boasts of any standard at all, as at the time
of writing, is N30,000.00 a term! How can the average Nigerian
worker, who earns less than N10,000.00 a month afford to pay for his
children’s school fees at such schools? And what choice does he have,
when the public schools are not functioning? At the end of the day,
most children of eligible school age are sent by their parents to hawk
wares in traffic jams, just to make ends meet. As time wears on,
these children join the ranks of the uninformed and illiterate, and
more often than not, veer into crime out of frustration.
Meanwhile,
the exorbitant school fees paid by the few who can afford it is not
tax deductible, as the State does not care whether the parents are
paying for the education of their children or not. Since the taxes
paid by the citizenry are meant for provision of amenities like
education, which does not exist or is grossly inadequate, where then
lies the justification of continued taxation of the people?
SOCIAL
SECURITY
In
caring societies, the government provides a sense of belonging to all
its citizens, irrespective of whether they are strong or weak. Those
who are strong and able to work are consciously encouraged to engage
in gainful ventures, which create wealth. Others who are not so
lucky, either due to ill health or other causes, are recognised as
such by the society and provided for in a caring manner.
In Nigeria
however, the reverse is the case. The few people in government
consume most of the national wealth through a bogus government
bureaucracy, which adds next to no value to the lives of the people.
Government recently admitted that 85% of the national budget is spent
on recurrent expenditure, leaving only 15% for all other expenditure
that touches the lives of the people. Meanwhile, less than 1% of the
total population of the country works for government, and another very
few are engaged in any form of meaningful employment. The
irresponsible manner in which the national wealth is frittered away
without any form of accountability to the people, makes public office
very attractive in Nigeria. Government officials do not have to do
anything for the people. If a Governor constructs a road, people hail
him as having tried! They fail to realise that provision of such
common amenities, is the reason for the existence of government in the
first place.
The
National Social Insurance Trust Fund is another drain pipe where
workers in the organised sector are compelled to make contributions,
without any hope of being able to reap any benefits from it whenever
they lose their jobs, or become unable to earn an income, for any
reason, as is the case in other societies where the idea was borrowed
from.
In Nigeria,
unless you are strong and able to fend for yourself, no one cares for
you. Your daily meal is entirely your responsibility, and if you are
unable to provide it for any reason, you may as well starve to death!
In any event, the government does not even know that you exist! Due
to complete lack of data on its citizens, Nigerians are of no
statistical importance. Census figures are always fraudulently
manipulated to serve some mischievous ends, thereby leading to a
situation where no useful data is available for any form of planning.
In the event of natural disasters, casualty figures are only
estimated, as no one knows for sure who is alive or dead at any point
in time. After the bomb blast disaster in Lagos, over 1,000 people
were estimated to have died, because that figure was close to the
number of the actual dead recovered from the swamps! This situation
can be contrasted with the unfortunate disaster at the World Trade
Centre on September 11 2001, where every casualty, to the last man, is
today known by name!
In an
uncaring society such as ours in Nigeria, one wonders what the purpose
of taxation is. The money realised from taxes are not put to any use
that people can see, and those who are unable to provide for
themselves are completely neglected and left to die, or eke out a
living by inconveniencing others. Destitutes are all over the place
on the streets, begging for money to eat, with no hope of any
provision from the social welfare departments, as is the case in other
saner societies.
MEDICARE
The
state of healthcare delivery in Nigeria is legendary, in its neglect
of the people. Government officials only parrotise the general saying
that health is wealth without knowing or caring what its underlying
meaning should be.
Most
hospitals in Nigeria are an eye sore, to say the least. The
environments are smelly, with suffering and pain everywhere. One of
the most harrowing experiences a person can face is to be ill and go
to a public hospital in Nigeria, or have to attend to a relation who
is ill in hospital. Nothing is available! Even water, which is quite
basic, has to be bought by the sick person or his relations before
operations are performed on them. This is certainly true of the
Braithwaite Memorial Hospital in Port Harcourt, which is supposed to
be a centre of medical excellence in Rivers State. When water is not
available, how can one talk of drugs? The doctors are disgruntled,
either from poor pay or inadequate conditions of service, or the
frustration that flows from not having the most basic tools to work
with. Most of them resort to referring patients to their private
hospitals, where they can at least earn some money from them, and also
provide some semblance of Medicare, albeit at exorbitant costs!
In view of
this, most Nigerians meet their untimely deaths from ailments which
can be easily treated, and from other ailments which they contact
while waiting in the unhygienic environments of the public hospitals,
waiting in vain for never available healthcare.
As is
always the case where public services fail, many private hospitals
have sprung up, to cash in on the non-availability of healthcare from
the public sector. These private hospitals are however either too
expensive, or due to lack of standards, end up being as bad as the
public ones. It is not unheard of for people who are not even
doctors, to set up “hospitals” in Nigeria, and even perform surgical
operations!
For years,
governments have touted the idea of health insurance, as a way of
introducing some sanity to healthcare delivery. But like all other
things Nigerian in nature, health insurance, which works so well in
other countries, and is private sector driven, remains perpetually at
the conceptual stage, with huge sums of money being wasted annually on
setting up its bogus infrastructure, which will never work as
currently conceived.
HOUSING
A
shelter over one’s head is one of the basic necessities of life, and
responsible governments the world over, strive to provide this
amenity, or encourage its provision through private enterprise.
Thus, functional mortgage institutions whose responsibility it is to
build houses and sell the same to people at affordable rates, exist in
different countries, and serve as the main ways through which people
own houses in other places. Where houses are sold to people, the
interest rates are made very affordable and spread over a long period
of time, for ease of payment. It is therefore an aberration in most
of the civilised world, to see homeless people, who are not being
provided any form of care by the social welfare authorities.
In Nigeria
however, the sight of people sleeping under the bridges, in
uncompleted buildings and under the open sky, even in peacetime, is
very common. Embarking on a building project is one of the most
harrowing experiences in adult life. Apart from the high cost of the
land and the intrigues surrounding land ownership which has led many
unlucky people to fall victims of fraudsters and land speculators, the
actual experience of supervising a building project, from inception to
completion is both exhausting and harrowing. The cost is also quite
another thing, and one has to live in debt for a long time afterwards,
if you are not a government official who just takes the money from the
public coffers to embark on such private project.
In a sane
environment where government is interested in planning for its people,
mortgage payments are tax deductible, and people who embark on such
projects do not have to unnecessarily strain themselves and their
families before being able to live in their own houses. In Nigeria,
you can hardly, if ever get tax rebates for money borrowed to build
houses, and there are no organisations ready to lend money for such
long-term ventures. In the end, most Nigerians live in shanties
called houses, with no visible efforts by government to put policies
in place to encourage home ownership. The National Housing Fund
remains a tool for political gimmicks, and in spite of the many years
since its conceptualisation, it remains a thought process yet to
deliver any houses to Nigerians, either now in the foreseeable future.
GENERAL
ENABLING ENVIRONMENT
Amidst
all the numerous bottlenecks highlighted above, survival in Nigeria is
difficult for the citizens, thereby resulting in many of them jetting
out of the shores of this country, even if in search of menial jobs in
other places, at least to be able to fend for themselves. This trend,
which the government is very much aware of but has done nothing to
stem, has led to the loss of very good brains who would otherwise be
in Nigeria today contributing to its development. Government pays lip
service to desiring development for the country, without putting any
concrete plans in place to ensure that this happens in a transparent
and auditable manner. Year in year out, huge sums are budgeted by
the government, but there are always complaints of funds not being
released for projects, even by the government agencies. Many vital
government agencies, such as the National Drug Law Enforcement Agency,
the Immigration Service, the Nigerian Prisons Service, to mention a
few, are starved of funds, and are therefore unable to play their
assigned roles in addressing specific areas of national need.
MEANINGFUL
TAX RELIEFS
The
tax structure as it currently operates in Nigeria today is outdated,
and offers
No
meaningful relief to taxpayers. The point has already been made that
government cannot justify tax collection in Nigeria because no
services are rendered in exchange for the taxes paid by the
citizenry. But even if taxation is not entirely eliminated because
government has somehow become used to this source of unjustified
revenue, then meaningful tax relief which bear a relationship with
actual expenditure outlays of taxpayers should be introduced. The
following are suggested areas which must be looked at as a matter of
urgency:
·
All expenditure necessarily incurred
by an individual tax payer in the provision of amenities which should
have been provided by government, such as roads, security, water,
Medicare, education, houses, etc. as outlined above, should be fully
deductible before computation of tax liability;
·
The rates for personal allowances
should be drastically increased from the current rate of 15% of earned
income, to 70%, to take care of the numerous responsibilities the
average worker in Nigeria has to shoulder in taking care of brothers
and sisters, relations, aged parents, etc., all of which are part of
the burdens which in African tradition, are required to be borne by
those who are perceived to be doing better than others and should
therefore be their brothers’ keepers in an environment of an uncaring
government.
·
The balance of the taxable income,
after all the deductions suggested above, should then be subjected to
taxation at a graduated rate which results in a maximum tax rate of
10% of earned income.
·
Government performance should be
constantly measured against its set roles, in line with the concept of
social contract, with the provision that the tax rates may be reviewed
upwards or downwards, depending on how well government is adjudged to
be performing in providing basic amenities for the people.
·
Accountability to the people should
be the watchword of government, such that the present neglect and
distance from the people by those in government should be
discouraged. People should have free access to those they elected, to
complain about inadequacies in their lives, and seek redress. Failure
to comply with such minimum such minimum standards should be a good
ground for recalling such elected officials, no matter how highly
placed, in a process devoid of fraud, intimidation and rigging, as is
usually witnessed in Nigeria’s electoral processes.
CONCLUSION
Nigeria is
a potentially great nation, so we have heard, and have been told for
years. Those potentials are however never going to be realised, the
way we are carrying on at the moment. The journey of a thousand miles
begins with the first step, if only in the right direction. We are
currently headed in no direction at all, and since we cannot remain
stagnant, we are actually retrogressing. Drastic changes therefore
need to be made by honest and dedicated leaders, who do not merely pay
lip service to issues, but are genuinely interested in seeing to the
emancipation of the citizenry, from a largely hopeless people, to
those who can wake up with confidence, knowing that their problems,
even though many, are in capable hands and are therefore sure to be
solved with time.
