ANAMBRA: WHY PAY YOUR TAX?

The idea of paying tax rests on the principle that expenses of government, in its efforts to cater for the needs of the people, should be borne in part by income earners, like workers, businessmen or corporate bodies. But in Anambra, a number of persons who refuse to pay tax insist that without collecting taxes from them, Governor Peter Obi has recorded and continues to record, tremendous success in simultaneously developing all sectors of the state.



Yes, in Anambra State, like in some other states of the federation, though for different reasons, tax evasion, the illegal non-payment or underpayment of tax (be it personal income, property or company tax) is widespread and deep- rooted. It is so, largely because of corruption among tax officials and lack of an effective system of assessment and collection that would compel all eligible tax-payers to discharge their civil responsibility of paying taxes. More fundamentally, too, the expenses of government worldwide are popular but the means and ways of finding the money.



As a result of tax evasion, revenues expected to accrue to government at whatever level, through tax collection, have declined or dried up completely, and development and welfare projects such as building of roads, hospitals and schools as well as provision of water and electricity halted over the years. Though in the case of Anambra, there are no abandoned objects, since work is continually going on, on all the uncompleted projects.

Really, it surprises everyone that tax evasion has not stopped Governor Peter Obi's policy instrument, the Anambra Integrated Development Strategy (ANIDS) from simultaneously recording solid, monumental achievements in all sectors of the state. It has not stopped him from building and rebuilding, equipping and re-equipping hospitals, schools of nursing and midwifery, to enable the institutions attain accreditation and upgrading and serve the people better. It has not stopped him from erecting faculty and department buildings, of law, mass communication, etc and re-equipping engineering department at the Anambra State University. It has not stopped him from supplying computers and science equipment to all secondary schools in the state.



Without payment of tax by the people, Governor Obi has made borehole in schools and communities in the state. He has built a network of 500-kilometer asphalted roads across the state in barely five years. He put up the Nigerian Stock Exchange building in Onitsha and launched ANIDS transport scheme with 90 buses and TRACAS with 40 buses, each of which number has more than tripled today. Without the payment of tax by the people, Governor Obi has almost completed the rehabilitation of the Obizi Water Scheme. In the face of tax evasion, the governor has donated thousands of motor vehicles, armored personnel carriers and communication equipment to police and other security agencies in the state. These are samples the newspaper space will permit. Indeed, Governor Obi's achievements in Anambra State can only be properly documented in not less than 1000 page book. Governor Obi's marvelous achievements belie the fact that Anambra State is one of the states that receives the least federal revenue allocation about N1.8 billion monthly. Ironically, the governor's stellar performances has prompted the people to question the state's current tax drive. They ask: If Governor Obi was able to achieve so much without taxing the people, why harass us now to pay tax? In addition, they insist, and quote the governor, saying, Anambra has no debt to settle, no local or foreign loan. Anambra is not a debtor-state. Again, they happily say, the state pays workers salaries regularly and promptly. Rather, Obi's achievement should encourage our people to pay their tax.



True, they have stated the facts, but their argument is not buy able. It is illogical. Are they saying because Obi has developed so much, the development of the state should stop and be static? At the start of his second four-year term, the Governor rightly acknowledged his administration's achievements but noted there is much more to do to enhance the well being of the people of the state. Had Governor Obi launched tax drive prior to, or during, his election campaign, Anambra people would have accused him of collecting money through tax to finance his campaign. But he did not at the time bother the people.



Now, Governor Obi's administration needs more money particularly from tax, to boost its Internally Generated Revenue (IGR) and its share of the federal allocation. The essence is to achieve improved welfare for the people. The government needs more money from tax to meet its target of building 100-kilometer roads per year. The government needs your tax to assist it to meet its target of building 1,000 classrooms yearly, i.e. a total of 4,000 in four years. The government is appealing to the people pay their tax to enable it complete the building of the N141 million medium scale water scheme for Njikoka/Dunukofia under MDGs-CGS Programme. The government needs money to complete the building of the Neem Fertilizer Plant in Amawbia, and maintain clean environment, refuse disposal, etc. And many more similar projects and services.



Because the people are reluctant to pay their tax, the government of Anambra State, through radio jingles and TV dramas, appeals to the people to pay their tax, pleading Anambra is developing and getting better, assist to develop it, Also, tax officials visit market stalls, shops and big firms to demand tax.



But we should respect ourselves and pay our taxes, and not at the sight of tax officers scurry away like rabbit flashed a torch-light in the night, or run like common criminals pursued by police. Of course, tax evasion is a punishable offense. In our clime, it appears only government workers (particularly civil and public servants, political appointees) pay accurate or appropriate tax. In the private sector, a number of employers deduct taxes from their workers but fail to pay same into the public treasury. In some cases, when they pay into government account, they underpay.



Though tax evasion is a very serious offense, it is taken lightly in Nigeria. In Europe and America, for instance, top politicians and business tycoons have been jailed for non-payment or underpayment of tax. Spiro Agnew, a former Vice-President of the Unite States, under former President Richard Nixon, was forced to resign his office for his private company's failure to pay tax.



In Nigeria, laws seem to exist only in the books. For laws to really exist, they must be adequately enforced. Laws that are not enforced do not exist. Come to think of it: is there tax law in Nigeria? In Nigeria, laws are made and enforced in such a way that they have remained cobwebs where the small flies are caught, and the great break through.



To wipe out the incidence of tax evasion and the consequences on government's inability to discharge its obligations to the people, several state governments have resorted to adopting ad hoc measures to collect taxes. One of such measures is the insistence on the production of a tax clearance certificate as a condition for obtaining certain services from the state. Yet, the efficacy of this measure has been thwarted by dishonest tax officials. Another measure is the use of private consultancy firms and task forces, which promoted tax drives, leading to sealing up of business premises and the consequent industrial harmony. Equally ineffective is the resort of some states to double taxation, in the form of all manner of levies, that have failed to take cognizance of the ability of individuals and organizations to pay.



The resort to these ad hoc measures points to the collapse of the existing system of tax assessment and collection and the inadequacy of the adopted measures for the same purpose. Fundamentally, there should be a total overhaul or reform of the present tax system which only guarantees that workers pay their appropriate taxes promptly. Such reform should blurt out corruption in the tax system, establish a more reliable way of calculating tax scales, exemption and rebates, and ensure that those who make the most money from the society pay the most money to the society.



Turgot, finance minister of the much maligned Louis XVI of finance, told the King: The expenses of government, having for their object the interest of all should be borne by everyone, and the more a man enjoys the advantages of society, the more he ought to hold himself honored in contributing to those expenses. That's Progressive taxation, which stipulates that those who make most money get the most from society and thus owe proportionately larger debt.



Since tax payment is not a voluntary but a mandatory and regular contribution to state revenue by income earners, it demands an evolution of an effective system of assessment and collection that will compel all eligible payers to pay proportionately and promptly. Meanwhile, let us pay our tax in Anambra State.



Ubabukoh is the Senior Special Assistant, Communication, to Governor Obi.