If Nigeria is interested in raising her revenues… (I)
We shall see what happens in the days and weeks after the expiry of Nigeria’s much-touted voluntary asset and income declaration scheme (VAIDS), which yielded a paltry N20billion out of a targeted N350billion or a mere $57million out of a target of $1billion (lets say 5.7%). That is the last figure in the public space, but is a huge failure if a child brings such a report home. We haven’t considered how much was spent between the Ministry of Finance and the Federal Inland Revenue Service on the scheme - including I’m sure, foreign travels to understudy VAIDS-like schemes in other countries. It’s Nigeria’s age of impunity. Only the connected survive. But the rest of us are watching.
The government has promised to come down hard on tax evaders who refused to take advantage of the VAIDS arrangement ‘to come out clean and confess their sins’. I wondered whether Nigerians are that kind of people who will come out and confess their unpaid taxes! I also wondered whether it was anything to a Nigerian to be ‘named and shamed’ for evading taxes? I think we are too far gone for that - even the person shouting about tax evasion is a tax evader. You know, one of Nigeria’s musicians sang ‘even you boo, get a boo’. That’s the way it works. Do Nigerians really understand the word ‘shame’? Did it not become a thing of pride in Nigeria for one’s name to appear in the list of chronic bad debtors of banks when CBN under Sanusi forced them to publish? Have we even got to the stage of countries from which Voluntary Declaration Schemes (VDSs) were copied, in terms of tax administration, discipline and culture? Does the history of Nigeria fit in with such an arrangement at all? What about political will? Can the government question and even jerk those who financed their elections and campaigns to the courts?
And so as the deadline expired on March 31, 2018, we started to see many interests crawl out of the woodworks to ask for extension. Some states finance commissioners claimed people had just started to come forward and things like that but it is a joke. What these interests have in mind is a total cancelation of the whole idea. The tax authorities are meant to start going after tax dodgers in a merciless manner as from the 1st of April and they promise that it will not be an April Fool’s game. There are however a number of issues around the whole exercise, stuff that none of the consultants employed to work on the project will dare raise with their employers. I will get to those issues in a bit. We are very used to gathering in our conferences and committee meetings and generally deceiving ourselves in this country. We are used to starting programs that fail. It’s our forte. No be today.
Blindsided focus on ‘taxes’
In the first place, whenever I have the chance, I always let those in government know that the focus on taxes itself is suboptimal. It’s a way of reducing the problem so as to deflect from the larger issue. Nigeria is not only losing out on taxes, but on rates, duties, fees, fines, and everything in between. In fact, we are losing massive amounts daily even from the proceeds of natural resources. At least 400,000 barrels per day of crude oil gets stolen from Nigeria’s bowels with no solution in sight. The focus on taxes alone, and all that talk of Nigerians not paying their personal income taxes or Nigeria getting only 6% of its revenues from taxes, actually allow the thieves of our fees, fines, duties, rates, and proceeds of natural resources to get away with blue murder. It’s a decoy. Are we sure that we shouldn’t be focused on getting all those other sources of income that focusing on taxes? Is there a likelihood that we may end up harassing and purloining small businesses that are barely surviving, to death in the name of tax enforcement? After all taxes are to be payable on legitimate transactions. What are legitimate transactions in a country where most activities are illegitimate? Look around you today, most of the wealth you see flaunted; the big cars, the bigger houses, all those guys spending millions every night in the nightclubs, all the frequent travels even for religious pilgrimages and high-octane holidays, all the flexing, even the big contracts that are procured by very smart guys are 99% illegitimate in Nigeria. Why don’t we close the loopholes of illegitimacies? Are our political leaders interested? I doubt.
I always recall APC’s first and only economic summit at the Hilton somewhere around May 2015. The summit was organized by Fayemi and other eggheads (oops one of Fayemi’s aides is actually named Egghead). They brought a thousand other eggheads - professors from everywhere at home and in the diaspora and even more who worked with development agencies. They were tasked to find solutions to Nigeria’s problems. I recall attending Education sub-committee session which was chaired by Mallam Bolaji Abdullahi. While Bolaji Abdullahi tried to steer discussions towards the need for vocational education, youth and skills, the professors were obviously wrestling him to the ground asking for more world-class universities. I was frustrated. I knew - just like Bolaji - who would later become the APC spokesman - that the solution lied with a massive investment in Nigeria’s youths and not in the acquisition of certificates.
But that is not the main gist of that even. In one of the plenary sessions, after all the rambling, it was question time. A white lady in front of me was recognized. She was tired of hearing professor after professor, ‘technocrat’ after ‘technocrat’ reel out all sorts of out-of-the-world ideas and then close off by bellyaching about how there was no money to fund their lofty capers. She said only one thing; ‘I’ve been to a few countries around the world, Nigeria is the only country I’ve been where no one gets a fine for over-speeding. How then do you hope to fund your budget?’. She sat down. I felt like giving her a hug but didn’t know how she will take it. The response to her concern from the ‘high table’ was off the mark and delusional as usual. So I humbly had a conversation with my feet and left the place. That event has had a lasting impact on my mind. It made me remember by sojourn as a student in London and what I learnt about the way they lived and organized themselves. London could have been more disorderly than Nigeria but for the fact that they enforced their rules. Overspeeding with your Ferrari is sweet, but you meet a bill of at least 80 pounds (N40,000 equivalent) at home for running past one single camera at just slightly above the recommended speed. And they will not want to know whether you are the Prince of Wales. In fact the posher and more aristocratic you are, the better.
The focus on taxes alone, and all that talk of Nigerians not paying their personal income taxes or Nigeria getting only 6% of its revenues from taxes, actually allow the thieves of our fees, fines, duties, rates, and proceeds of natural resources to get away with blue murder. It’s a decoy