ByAbdulsal am Ajetunmobi
[email protected]
I am continually amazed at the attitude the
people in Nigeria have towards uprightness of character in public life.
There seems to be in their mind � I am talking about the self-acclaimed
religious, intelligent, educated and more enlightened leaders who seemingly
understand the image problem of the country � a disconnect between the
rhetoric they make in public about public accountability and their delivery
on those promises.
First, there was the reinstatement of the
suspended Plateau State governor Joshua Chibi Dariye in spite of the "grave"
allegations against him which the President Obasanjo himself considered as a
moral burden on the nation�s psyche. Now this week, reports had it that
President Obasanjo�s farm at Ota in the South West is raking in an income of
�30 million Naira ($250,000)� every month.
So far, so good. But on the last point, what
are the president's tax and accounting responsibilities to the nation on
account of his corporate income? Well, I do not intend to go into an
elaborate list here because I am not privy to that information. However the
purpose of this piece is to provoke the answer(s) from the President
himself. Adam Smith, the Scottish founding father of economics who developed
much of the theory about markets that we regard as standard theory now once
said: �Where there is at least a general suspicion of much unnecessary
expense, and great misapplication of the public revenue, the laws which
guard it are little respected.�
To start with, it is not enough for the
President to publicise the monthly corporate income from his farm in order
to �quell rumours that he was stealing money from the Nigerian state�
without equally making public how much of this goes into the nation�s
treasury by way of taxation. The public needs to know this because a great
reluctance on the part of almost all of us to pay taxes has been in
existence in the country for years and our entire tax system has been
plagued by the existence of tax avoidance techniques that are seemingly
available to the wealthy in our society. Many of us are forced to arrive at
the opinion that the men and women of importance who are well-connected and
who have large estates and watchful lawyers always find ways of evading or
avoiding the tax burdens.
In an ideal world, those who consume government
services should pay for them through the tax system. Cheating on the
nation�s tax system is all pervasive in all classes; except perhaps among
the compulsively honest, cheating usually occurs in direct proportion to
opportunity. The vast majority of the Nigerian public believe, as I do, that
everybody else is engaging in tax avoidance or outright tax evasion. This
has a far-reaching effect on the behaviour of the nation�s macroeconomic
variables such as inflation and industrial production growth rates and the
consequence of this is that the poor majority who pays tax is forced to
carry a heavier tax burden on the services they render and purchases they
make thus becoming poorer and poorer.
These compulsively honest taxpayers (i.e. the
poor majority) are an eclectic group. They include �danfo�and taxi drivers,
civil servants, market men and women, labourers, nurses, doctors, high
school teachers, and many, many self-employed with marginal businesses
wanting one thing or another from government, etc. Of course, it could be
argued that anybody has a right to evade taxes if he can get away with it
and no citizen has a moral obligation to assist in maintaining the
government, but I think that every good citizen should be willing to devote
a brief time during some one day in the year, when necessary, to the making
up of a listing of his income for taxes in order to contribute to his
government, not the scriptural tithe, but a small percentage of his net
profits.
Nigerian is in need of effective and stable tax
systems to finance the public sector. Tax evasions are impediment to
progress. The propensity to evade tax must be linked to endogenising honesty
by this government famed for its loud noise about probity. To this end,
corporate income must be taxed when is earned by any corporation whether
dealing in farming activity or not and, the tax should also extend to the
corporate stock when is sold if its value has increased by the retention of
previously taxed income. Nigerian economy is excessively inflationary.
Inflation however creates some capital gains even where there is no real
income, hence chargeable disposals or assets must also be subject to tax as
well.
Last week, the Finance Minister Ngozi
Okonjo-Iweala condemned the Transparency International for ranking Nigeria
as the most corrupt country in Africa , the third most corrupt country in
the world. Perceptions may be wrong but they are realities. Transparency
International has in the past been challenged by governments which are not
happy with how their countries were classified. President (Carlos) Menem (
Argentina ) ran a campaign against it and now he is running the campaign
from the prison where he is for corruption.
The avoidance of tax may be lawful in Nigeria
as is the case in developed nations like Britain , but it is not yet a
virtue. And, as the foremost citizen of Nigeria , President Obasanjo has an
obligation to the country's tax system and he should therefore render to the
public his tax and accounting responsibilities on all his assets.
In addition, the President should also take up
the gauntlet thrown at him by the suspended Plateau State governor Joshua
Chibi Dariye whom he just reinstated. The latter this week, in response to
the Federal Government�s letter alleging �grave� impropriety against him
retorted: �All of us are living in glass houses. Let no one start throwing
stones�� How far that is true, the ball is in the President�s court and must
play it now without delay.
Abdulsalam Ajetunmobi
London , UK
