Gombe: The burden of tax on an over-stretched private sector

BY SALISU ABDULLAHI

That the Gombe State Government is boastful of being among the states not owing workers’ salaries as an accomplishment is an egregious disappointment, to say the least. The population of Gombe State is roughly 3 million. The state’s 60,000 workforce out of its 3 million population passes a chilling message that merely 2 percent of the population is employed as civil servants. But when you put into the equation the fact that the 3 million population contains approximately 38 percent children (age 1-14) who are dependents, it’s not difficult to see that more than 50 percent of the Gombe population are private sector survivors. And with a weak private sector, there can be no gainsaying the fact that Gombe people are sweltering at the south end of the economic ladder in Nigeria.

As of February 2020, Wikipedia statistics show that Gombe is the second poorest state in the federation, with a Gross Domestic Product (GDP) of $2,501 (N75,000) next only to Yobe State. According to the National Bureau of Statistics, in 2019, Gombe State was the fifth lowest performing state in the federation. And the reason cannot be far-fetched. States generate revenues from well-functioning private sector. With a state private sector of more than 50 percent producing sub-optimal goods and services, it does not require rocket science to see why Gombe is at the south end in terms of internally generated revenue in Nigeria. The state virtually gets tax revenues from income tax (from civil servants).

As if to exacerbate the welfare of the people of Gombe state, the government, in a frantic reactionary move to make up for shortfall coming from the Federation Accounts Allocation Committee (FAAC) plans to increase taxes. It is undeniable that healthy and hefty tax revenues form the very foundation of development in society, and Gombe is no exception. The sudden emergence of COVID-19 has swept virtually every government of the world off their feet, with many scampering for financial safe havens.

But to every rule there is an exception; and the exception in the case of Gombe State is that further tax burden on the disadvantaged private sector would inflict excruciating pain on the people. To make matters worse, reduced economic activities in the country has put many private sector players in dire straits. Many businesses have already gone under, with the remaining struggling to survive.

It is paradoxical that whereas everywhere else in the world, governments are strategizing on ways to give businesses tax freedom in a bid to infuse life into them, Gombe State Government is mulling an action that would strangulate the private sector.

And it is plausible that compliance of a new tax regime would be difficult in a state like Gombe. It would be tantamount to milking a barren cow. The practical thing to do to lift the people of the state out of poverty and increase internally generated revenue would be to invest in exploring the state’s bountiful mineral resources and improve services.

For starters, the soil of the state is rich. In this era where the federal government has embarked on a policy of self-sufficiency in food production, the state’s soil and its vibrant youth policy puts it in a prime position to feed Nigeria and lift the population out of poverty.

The state also needs to invest in industries. Gombe has the capacity for manufacturing light consumer products. The state also has great need for healthcare products. The foundation for such products has been laid years ago. The only challenge there is to improve on it.

It has been proven that Gombe is home to 13 mineral resources. A good state leadership must develop the mining industry and increase revenue generation potentials and get Gombians out from the bottom of the poverty well.

Then there is the tourism industry that is virtually untapped in the state. To start with, Gombe State has a unique golden soil that earns it its name: “The Jewel of the Savannah.” That alone is a tourist attraction.

And to oil all of the above potential revenue generating investments, the state would need a steady supply of energy.

State investment, and not further tax burden on the suffering people of Gombe is what is needed to fill the lacuna of federal allocation from the federal government, which is the emerging new reality. And when the people of Gombe start to work, they will be able to pay taxes and build the state.

The time to do that is now.