Why Nigerians no longer want to pay tax

BY HASSAN GIMBA

There is this hullabaloo that has enveloped the country, with debates all over, in some instances threatening to degenerate into fisticuffs. It is all about the tax reform bills. Even though, after all is said and done, it may end up as an issue that signifies nothing but being blown out of proportion, it made me recall Macbeth’s speech in William Shakespeare’s Macbeth.

In his speech, he surmised that there is no meaning or purpose in life. Understandably, with his wife dead and armies marching against him, he came face to face with the transience of life. He visualised his life following a “way to dusty death” and likened life to a candle flame.

To Macbeth, “Life is but a walking shadow; a poor player that struts and frets his hour upon the stage, and then is heard no more: it is a tale told by an idiot, full of sound and fury, signifying nothing.”

We may not say the tax reform bill is a tale full of sound and fury but when considered from the submission of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the whole idea does not signify anything; it may amount to nothing. But that is if we are truly practising constitutional democracy and desirous of adhering to it.

In a 2470-word memorandum, the RMAFC buttressed the fact that tax reforms are good for the overall interest of the country’s economy but pointed at complexities in determining tax by derivation as “VAT is a tax levied on the consumption of goods and services. The final tax burden falls on the consumer, and the tax is remitted by businesses (agents of VAT collection) to the tax authorities. The complexity in determining the taxpayer’s “residence” for derivation purposes arises when goods are purchased in one location and consumed in another, the seller and buyer operate across state boundaries, and VAT reporting systems do not track the end-use location effectively.”

The memorandum gave an example: “A Man from Kano Buys a Fuel Pump in Lagos for Use in Kano State.”

Most importantly, the memorandum reminded us that Section 162 (2) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) empowered the RMAFC to determine the formula for the equitable sharing of revenue among the three tiers of government and to ensure that such formula reflects the principles of fairness and justice.  It then asserted that the Constitution conferred on the RMAFC the sole power to mediate in matters of revenue allocation for the three tiers of government.

Paragraph 10.2 of the memorandum warned that: “The Constitution, being supreme, does not envisage that any other Act of Parliament such as the VAT Act could assume this responsibility. Any such attempt would contravene the Constitution. Therefore, the RMAFC remains the sole arbiter in producing allocation formulae that are fair and equitable for the three tiers of government. Any deviation from a formula crafted by the RMAFC risks violating constitutional provisions and undermining the Commission’s role as the impartial arbiter of revenue allocation in Nigeria.”

Sometimes, you wonder what our lawmakers know. Many have been in the national assembly more than once, including the senate president, his deputy and principal officers. Yet they were at each other’s neck on an issue they had no right to legislate. Even those against the bills were not doing so because of their knowledge that it was not their turf as lawmakers. Sad, isn’t it?

Nonetheless, we will say the little we can about the issue, hoping it will contribute to the debate on tax reform.

In the first place, why should a Nigerian, especially a northerner, raise the muscles of his neck over any tax for that matter, considering that it is in the tradition of the northern system of government, which even the colonialists met, to pay tax?

Not only that, there was a time when northerners and, of course, most Nigerians willingly gave, not even paid, tax. Sometimes, payments are deducted from the source, which means that the payee had no choice but to see the money, in this context, deducted.

A story was told of how, in the 50s, northerners willingly taxed themselves and gave the proceeds for the education of their sons in the United Kingdom, then the focal point for education. It was said that northerners were made to contribute one penny each, and they did so happily. That story may or may not be the whole truth but it is an indication of what trust can do – to make people give taxes out of their own volition. Two of those who benefited were Doctor Bukar Shuaib and AJKG Imam.

Dr Bukar Shuaibu, CFR, born in 1927 in Geidam in the old Borno Province (now Yobe state), attended Elementary and Middle School, now Government College Maiduguri, before proceeding to Barewa College between 1934 and 1948. He was at Liverpool University from 1949 to 1954 where he obtained a bachelor’s degree in Veterinary Medicine. A member of the Royal College of Veterinary Surgeons, he was the first northerner and Nigerian to achieve this feat. He later attended Edinburgh University and obtained a diploma in Tropical Veterinary Medicine Between 1957 and 1958.

Alkali Jafar Kalli Goni Imam, popularly called AJKG Imam, or Malam Kalli, was the first Kanuri and northerner to be sent to the United Kingdom for a full degree course in Forestry. While there, he attended Aberdeen University in Scotland and graduated with a BSc in Forestry, also in the fifties. Born in 1928 at Benisheik, where his father was on posting as a staff of the Borno Native Authority, he came from the illustrious Imam Family.

There is no doubt that trust was the main determiner in making earlier citizens pay taxes willingly. There was trust in the leadership of the day and the knowledge that the taxes collected would not be misappropriated. Now, even…

To be continued…