Over the years, succeeding governments have relegated other sources of revenue, limiting the nation’s revenue to oil and a few mineral products.
However, one major source of revenue, which developed countries like Britain and United States have taken advantage of is taxation.
Federal Inland Revenue Service (FIRS) Chairman, Babatunde Fowler, disclosed that the non-oil sector outpaced the oil sector with a 54% contribution to the N5.32 Trillion revenue generated in 2018.
Taxation, no doubt, contributes to making a relatively stable economy but unfortunately, the tax burden in Nigeria has not been evenly shared, with a number of vices afflicting the tax system, such as touting and multiple taxes deliberate avoidance.
In 2018, FIRS disclosed that about 6,772 billionaire businesses in in the country do not pay taxes, adding that this category of organisations have between N1b and N5b turnover in their accounts, but have no Tax Identification Number (TIN).
Experts have lamented this unsavory situation, urging the government to put in place measures for fair distribution of taxes among Nigerians.
They also urged civil society organisations (CSOs) and the media to track internally generated revenue at both the national and sub-national levels to guarantee, fairness, equity and justice in tax administration in the country.
While speaking at a two-day workshop organised by Niger Delta Budget Monitoring Group (NDEBUMOG) and sponsored by OXFAM, Dr. George-Hill Anthony also supported transparency, saying it is the way forward in developing the country.
In his presentation, titled: Analysing Federal Government Budgetary Stream and Connections to taxation, Anthony who is the CEO of NDEBUMOG alleged that occasionally, the government would claim to wave tax payment for some people or organisations because of partnership but would not involve other segments of the populace. He condemned such dealings that are not made in the open.
He added that for the country to be on the path of sustainable growth and development, there was a need for the government to promote openness and transparency in economic decisions and policy making.
Anthony noted that it was unfair for the government to be granting tax waivers and incentives to the rich while insisting that the poor fulfill tax obligations.
He said: “There must by fiscal transparency. For example, if a rich man is going to build a concrete road and government is not going to pay, ideally the money that such company is going to use to build that road is going to be deducted through that company’s tax, however, there must be transparency. It should be made open for all to see. There shouldn’t be any secrecy.
“Citizens should know about the incentives between the private company and government on tax waivers. That is fiscal transparency, equity, and social freedom. They should be put in the public.
Every human being that is of economic value has a price tag, either you are rich or poor. The so-called rich have a price tag, which is their net worth.
What is the amount of tax that they are paying; are they paying at all or not? That is tax equity. There must be tax equity across the board.
So, what we are demanding are tax equity and social freedom. Also, all these PPPs that government is going into with countries around the world, what are their implications to our children,” he asked.
At the workshop, which had participants drawn from 16 states – Abia, Imo, Enugu, Lagos, Delta, Akwa Ibom, Anambra, Ebonyi, Cross River, Bayelsa, Edo, Ondo, Ogun, Ekiti, Oyo and Rivers state, it was noted that lack of coordination of tax justice efforts in the formal and informal sectors of the economy leads to reduced results.
It was also noted that the vague and open-ended nature of some items on the approved taxes and levies list was responsible for the exploitation of the poor and the widening of the inequality gap.
They hinted that the unavailability of the robust database for Federal, State, and Local Government taxpayers, has led to complications on tax collection on each level.
Specifically, Senior Consultant, Frontline Consulting, Mrs. Victoria Okonko lamented that despite an increased number of taxes approved for collection, a lot of illegal charges exist in some states and local governments.
She identified the illegal charges to include: environmental support fees, permit/processing fees, pest/vector controls fees, and rumination charges, effluent discharge and turbidity levy, operational permit/sewage, LG support levy, LGA sanitation, and ecological tariff.
She noted that the states involved in these “illegal” taxes cut across the board but are more pronounced in Abia, Edo, Bayelsa, Delta, Ondo, Bauchi, Kaduna, Plateau, Kastina and Federal Capital Territory (FCT)
She, therefore, recommended education for taxpayers on approved taxes and review of States and Local Government operations by the Joint Tax Board (JTB).
“There should be a mechanism to pass all proposed tax laws through a central body, perhaps the JTB in addition to the existing procedures to ensure that arbitrary/similar tax laws, which are disconnected with the overall policy direction are not included.”
The consultant bemoaned that despite fines and imprisonment stipulated by relevant laws, there were still occasions of tax touting in the country.
She noted that it is now common that unprofessional and untrained individuals were engaged to enforce collection of taxes and levies.
“Only professionally trained personnel should be involved in tax assessment and collection. The JTB could explore the possibility of centrally recruiting, training and deploying personnel to collect taxes at LG level to ensure professionalism and reduce multiple taxations.”
In the communique signed at the end of the workshop, the group recommended massive deployment of technology in the tax collection process to ensure transparency and to block leakages.
It also asked that JTB, which comprises the Federal, State and Local Governments should expedite the process of harmonizing taxes across the federation and streamlining collection points to avoid multiple taxation and extortion.
It also urged the government to review existing tax laws to meet with contemporary economic realities, as well as ensure the achievement of voluntary compliance by taxpayers.
“CSOs should expand and deepen advocacy on tax policy improvement to deepen commitment to reducing inequality. CSOs should aggressively deepen advocacy and sensitization amongst the vulnerable groups, most especially women in the informal sector from being harassed and overburdened by tax payment,” the group said.