By Joseph Odok PhD Esq
I am not excited by all the paparazzi about tax Reform Bills. From inception, Nigerian monies have been for the rich in exclusion of the poor.
As a South-South person, we celebrated 13% derivatives from oil, and it has only increased money for politicians and government with the poor getting poorer. With the Odili and Wike fight, we already have a glimpse of how the derivatives are spent, and that is the same if other states are exposed.
With the removal of fuel subsidy more money distributed from FAC to States. Yet we still see poverty and most state governors borrowing more with worsening attention on infrastructure and human capital development. There is rather an increase in profligacy by those in government.
With the passage of the Petroleum Industry Bills, there was so much talk about transparency in the oil and gas sector. This is not the case, as the management of NNPCL has become more opaque with more corruption that will free money thereby making more funds available for the rich and the poor poorer.
With the contract for protection of our pipelines by a company belonging to Tompolo, oil bunkering and theft have not reduced. The OPEC benchmark has not grown steadily, yet the class of few rich have continued to benefit by taking advantage of the loopholes to maintain the imbalances between the rich and the poor.
The said reforms by CBN, including the merging forex, have left more Nigerians poorer with few individuals getting richer. The CBN policies are looking more like propaganda, as it has shown ineptitude in making its most primary function: an example of framework to makes monies available in ATM an impossibility. Rather, POS has more money available, with the poor made to buy their own money.
Tax Reform Bill, like the removal of fuel subsidy, will bring nothing unless there is focus to create a framework for fiscal discipline and transparency.
The monster of corruption must be addressed first before tax reform bills. Without addressing the monster of corruption by recovery of looted funds and blocking of loopholes, the tax reform bills will end up as another way of increasing burden for the poor and enriching already rich, as the case with removal of fuel subsidy. Is the fact that the current administration is borrowing more after the removal of fuel subsidy not enough to tell us that focus on tax reform bill without addressing issues of corruption will rather excalate the problem?
In the same vein, more monies through borrowing have not helped Nigerians because loans are tied to extravagance of politicians, not tied to projects.
In sum, Nigeria’s problem has never been in the generation of funds but the management of funds that has constantly left the poor poorer and the rich richer. As it stands today in Nigeria less than 5% of Nigerians are richer than 95% of the greater population of Nigeria. This outlook of a focus on few rich people is also visible in our budgeting system with more funds allotted to the leadership of the executive, legislative and judiciary arm of government even in our current budget
In conclusion, I see the agitations for tax reform as another way of suffocating the poor. Come to think of it, there is nothing like the reform will exclude the poor when the increase of VAT will impact on the prices of goods and affect standards of living of the common man. The increase in VAT will obviously make producers and manufacturers increase prices of goods and services which will not exclude the poor that will surely buy in same market
Since the Tax Reform Bill in Nigeria has been met with skepticism, and rightly so. The proposed reforms, including the increase in Value Added Tax (VAT) from 7.5% to 15%, may exacerbate the economic burden on low-income Nigerians.
Rather than solely focusing on tax reform, it’s essential to address the root cause of Nigeria’s economic woes: corruption. The mismanagement of funds, embezzlement, and lack of transparency have led to a situation where the rich continue to accumulate wealth, while the poor struggle to make ends meet.
To curb corruption, Nigeria needs to:
- Recover looted funds:
Ensure that those who have embezzled public funds are held accountable and that the recovered funds are channeled towards developmental projects.
- Block loopholes: Implement measures to prevent corruption, such as strengthening institutions, increasing transparency, and enforcing accountability.
- Increase transparency in governance:
Make government spending and decision-making processes more transparent, allowing citizens to track how their tax contributions are being utilized.
- Strengthen institutions:
Ensure that institutions responsible for combating corruption, such as the Economic and Financial Crimes Commission (EFCC), are well-funded and empowered to carry out their duties effectively.
- Promote fiscal discipline: Encourage responsible spending habits among government officials and ensure that budgets are aligned with development priorities.
By addressing corruption and promoting transparency and accountability, Nigeria can create a more equitable economy that benefits all citizens, not just the wealthy few.
