By Musa Mbalo Abdullahi, Ph.D
Over the last few weeks, the Nigerian body polity has been inundated with a cacophonous debate and sometimes senseless rantings over yet another kyte thrown by the President Bola Ahmed Tinubu administration in it’s free termined efforts to “reposition the Nigerian economy and move the nation forward. This has strategically swayed national attention once again, away from the numerous burning national issues of grave concern.
Without any iota of doubt, the hullabaloo generated among Nigerians since the ‘controversial tax reform bills policy was made public, has further set the stage for more division among Nigerians. The central argument was that the policy was big enough to return Nigeria and Nigerians to a more workable Parth of economic prosperity.
But alas, it has rather become an albatross of a sort causing more divisions and brewing renewed sentiments and resentments among Nigerians exposing both the ignorant and the ill-informed as well as both the miss-informed and the half informed, all locked up in an unfortunate wagon of primitive struggles for the control of the so-called ‘national cake’.
Since the national Assembly jettisoned every important national question for the Tax Reform Bills, lines of divisions have continued to grow bolder among Nigerians by each passing day, while sentiments of all sorts are also mounting , but which add nothing to us as a nation in terms of forward looking aspirations. Everybody to themselves, and the winner, whether by hook or crook always and , naturally strives to take all. Yet, we pretentiously lip, “Nigeria we hail thee, our own thy native land”?
Since the emergence of the Executive bill seeking to reform or beter put, harmonise the different tax laws in the country, tongues have continued to wag.
Of all the mixed grill of attacks and counter attacks; supports and rejections and even the mass docility that have trailed the tax reform bills of Mr. President even in the face of daunting resentments and withdrawal or amendment advisories, there are so many salient issues that sentiments , politics and selfishness have effectively veiled, so much that those critical national questions are swept under the rugs.
Before narrowing this discourse to the tax bills, the implications of the reform (should it sturbonly sail through), and the way forward, a few posers will vitally suffice here.
To begin with, of all the myriads of survival challenges bordering on harsh economic conditions leading to unprecedented poverty, diseases and deaths; of the unimaginable insecurity in the land that has led to historic loss of unquantifiable lives and properties, closure of factories , hospitals, farms and countless nano industries, replete with gross uncertainties amidst different separatist agitations and internal violent conflicts; why has the tax reform suddenly taken the center stage and tend to occupy top priority position? Why has it become a matter so crucial to have overwhelmed all other important national challenges?
Further more, anytime the senate or is it the national Assembly abandons everything of national importance to hurriedly focus on a particular bill, it seems there is more to it than meets the ordinary eyes; whenever issues that had remained non issues over the years have suddenly been catapulted to the front burner, there is more than the eyes can see; and when government deliberately throws a spanner or a banger on an already turbulent and dehumanising situation, it is a careful diversionary plot aimed at allowing room for undercover evil plans to progress unhindered.
The second salient question on the lips of many, which I also find expedient, is the fact that, President Tinubu has not for once hidden his intention to expand the tax net so that government could scoop and amass more revenue. However, what many did not envisage from the intension was the systematic plot to disagreegate tax collection and redistribution.
On this premise, social critic and activist Remo Omokri asked the same question the other day and this keeps charging my head…the question is…
After the unprepared fuel subsidy removal, the floatation of the naira in the international currency market and the hike in electric tariff among many other draconian policies, resulting in unprecedented rise in revenue earnings for government, and more revenue allocations to the three tiers of government, what are the physical impacts ?
Months in-months out, consequential monthly distribution or allocations to the Federal, States and Local Governments have been in trillions of naira as has never been so humongous in the history of the country. What have Nigerians seen on ground that are so tangible and visible as development indices to justify the increased revenue?
At least, when people pay through their noses, they ought to see resultant benefits in so many facets of their lives, different from pre-existing situations. This will encourage further payments and contributions. That is the real meaning and definition of renewed hope. But none of these is evident anywhere worthy of reckoning. Yet, the dragnet for tax scooping must be expanded, irrespective of the hardship faced by the citizenry.
In any case, when promises of hope continue to birth additional hardships, stress and precarious treacheries for the ‘leprous” and vulnerable, while the proponents of the fictitious hope remain in affluence, then there are underground plans that are dangerously hidden in-between the lines of the superficial reforms. And because Nigerians are already balkanised blindly along tribe, region and religion, the danger that lies behind the cloud is beyond the reach and comprehension of the innocent, unsuspecting and deluded senses.
Now back to the controversially wrapped up machinations of the tax reform. Lay manly speaking and irrespective of the jaundiced professional and or unprofessional attempts to provide confusing explanations for and against the necessity of it, the bill is a clarion wake up call and reminder to the north.
As presently constituted, the different tax regimes have been a massive drain in the capacity and ability of the average Nigerian. To make matters more unjust, the distribution formular and pattern are awkward and unfortunately skewed to the disadvantage of many states, just because of the centrality and privileged positions of a few states that play host to the head offices of most, if not all the multinational and national corporations in the country. Afteall, who asked the other states to be docile and robotic?
As postulated by some analysts, even if the controversial tax reform policy is well intentioned, it would have been delayed for the promised impacts of the subsidy removal and floatation of the naira to begin to manifest first, instead of being hasty in adding enormous burden on the people. It is no doubt an additional economic burden on the people because no economic argument or explanation can take away the fact that any additional taxes on manufacturers and institutions would naturally affect the cost of goods and services as well as costs of production, which will invariably rest on the shoulders of the struggling masses.
Well, this won’t make any sense to those who are bent on squeezing out the little economic blood still left in the lives of Nigerians. What matters most now, is the overall implication of the tax reform plans. This looks like a clandestine plot to further disaggregate the country or better put, set a solid stage for the balkanisation of the Nigerian nation. Well, that is a debate subject for another discussion all together. What is central to this discourse is the position of the north or Northern Nigeria.
It is now crystal clear that should the new or would be tax law take effect, the capacity of most states, particularly northern states would have been halved if not made worse than that. This is to say, their monthly ‘takt-home-,pay’ from federal purse (Allocations) will drop massively since VAT (Value added tax) proceeds would now be distributed on collection bases. Lagos, Rivers and may be Ogun states where all companies, banks, telecom service providers and most industrial outfits have their headquarters will enjoy the benefits of high collections, because taxes are remitted at head office levels and paid in the states such head offices are domiciled . This, irrespective of the agricultural products and the volumes of markets the north may boast of, most of their VAT payments will be remitted in Lagos.
A WAKE UP CALL FOR THE NORTH
As bad or as wicked as the tax reform bills of President Bola Tinubu are being perceived (wrongly or rightly), this looks very good for the north to learn bitter lessons through the hard and only one way, wake up from their slumber.
It is a sad reality that decades after decades, northern leaders have continued to collect humongous federal allocations, but with very little or nothing to show for it in terms of concrete industrial base for the abundant agricultural and mineral resources that the vast area is endowed with. The implication is that the areas that are able to use their brains, have developed the wherewithal to collect and process our (north’s) raw materials tax free, process and use the same northern markets to sell and collect taxes. Too bad!
The north and their leaders would rather empower someone from elsewhere than empower their own to grow industrially. Surely, trouble looms in the horizon for northern leaders, especially the governors who will be caught in-between the devil and the deep blue sea in their efforts to meet their governing obligations to their citizens.
But, come to think of it, should the Tinubu bill scale through the national Assembly, which is not unlikely, what plan ‘B’ do the northern leaders and governors have up their sleeves?
The Banking Sector: Without doubt, no matter the number of banks and their branches across Northern states, all taxes accruing therefrom are paid to Lagos where their headquarters are located. Sadly, all state governments in the north operate their finances in banks that are headquartered in Lagos. This means, even the taxes that the governors and governments themselves pay heavily, won’t return to them, but end up in Lagos and elsewhere.
Therefore, what will happen to the so-called high collection status of Lagos, if all states pull their monies from all banks that are domiciled in the so called commercial center? Are these state governments not in pole positions to recapitalise community banks or microfinance institutions into full banks to bolster economic activities by promoting the banking system across their respective states so as to break the unwarranted monopoly of Lagos in this regard?
When citizens have shares in banks they can call their own, and with branches scattered across all local government areas, all states can guarantee effective collections of their taxes, create job opportunities and develop the agricultural sector through access to small and medium scale loan facilities to rural farmers and other petty businesses.
Agric -Sector: It is also clear that over the years, there have been massive evacuation (exportation) of assorted agricultural produce, tax-free, from the north to other parts of the country. Any plans to counter the new tax bill in terms of minimising it’s effects on northern states, should it become operational? States should start thinking of promoting the establishment and growth of agro-industries, and encourage the processing of major crops of comparative advantage in their states.
Furthermore, export of raw agricultural produce should be heavily taxed, beginning from the markets to trucks conveying same out of the states. In addition, all multinational companies engaged in farming in Northern states should be mandated to pay their taxes to the states of their operation or change their locations.
The Mining Sector: This is another lucrative area that northern states, especially those who have been sleeping must wake up quick. Giving the resource availability the region is endowed with in variegated mineral deposits, northern Nigeria has no reason to be dependent on any region, to the extend of being tagged “parasites”! Like has been partially started by the Nasarawa State government, all mining companies prospecting in the state, be made as a matter of law, to establish their processing plants in such states and must be ready to pay their taxes in their host states. This will also promote economic activities through job creation and growth of other businesses. These and many other measures, will steadily and surely catapult the north out of it’s current economic quagmire and “dependency” or “parasitic” status.
When the north was the economic hub of the nation, generating the bulk of the resources that developed the south right from colonial epoch through the oil boom era, the north did not tag any region a “parasite”. When through tax alone, the north generated over 85% of the wealth of the nation; when through the groundnut pyramids, cotton and cattle tax monies as well as the tin and collumbite from the Jos Plateau, Lagos and most southern cities were developed, the word ‘parasite’ had not existed, until today that oil and VAT are driving the economy. Surely, it is natural and easy to forget the foundation, as soon as the finishing presents a superficial beauty and ecstatics.
There is no doubt that bountifulness is the mother of inertia, while necessity remains the mother of invention. For too long a time, the north as a people have slumbered over the benevolence of God. From rich population to vast arable land to livestock and endless mineral deposits bountifully embedded in the land, the people and their leaders have been utterly disappointing in their inactive and misplaced drive towards the salvation of the region and it’s massive population of poor, vulnerable and hapless peoples.
Thank God for President Tinubu who has not hidden his disdain for indolence and dependency syndrome. Thank God for a tax reform initiative that clearly spells doom for most states, particularly northern states that have continued to depend largely on federal allocations to drive their states, for some, even very carelessly. Head or tail, and irrespective of our understanding of the reform bill and the actual implications it portends for all Nigerians, this can mark a turning point for the good of the country if leaders at all levels reconfigure their thinking faculties and move with the realities of the twenty-first century and the new direction of the world.
Musa Mbalo Abdullahi, Ph.D
Writes from Lafia, Nasarawa State, Nigeria.
