In Nigeria, the corruption that a lot of
people dread is actually made worse by the fact that a lot of them live under
the tax radar and often search, in vain, for the strength that can be deployed
towards fighting corruption as paying tax gives you a strong voice with which
to challenge corruption. It is also the very reason why Nigerians lack the will
to protest when government vehicles, buildings, office equipment and furniture
are wrongly handled.
When we say that taxes aren’t collected in
Nigeria, we are referring to taxes beyond what the big corporate organizations,
whose taxes come in millions of naira and also documented workers whose taxes
are taken from sources based on a fixed percentage of what they earn. The tax
mechanism is so inefficient that in some instances, even these categories of tax-payers
escape taxation, as recent events in Plateau State have shown: the state
internal revenue board had to drag the University of Jos over accrued tax, to
the tune of eight million naira. Also the state government had to seal the
premises of the National Veterinary Research Institute (NVRI) Vom and MTN
mobile phone communication company over tax evasion.
Before the Local Government Service Reforms
of 1976, the local governments (known as Native Authorities before the reforms)
were financially independent in the sense that they received no statutory
revenue allocations from the federal and state governments as is the case today.
Between 1991 and 1992, further reforms made it mandatory for 20% of federal
revenues to be allocated to the local governments across the nation. Seven
years later, it was enshrined in the 1999 constitution.
Thus the 1976 reforms outlined the sources
of local government revenues to include rates, grants, statutory allocations,
fees/charges, fines, earning/profits, loans and miscellaneous sources. Despite
how “petty” these non-oil revenues may appear, the large population of Nigeria
should give it some gravitas and is reason why they should be pursued with all gusto.
Today, the non-oil revenue sources have
been forgotten by the states and local governments whose responsibility it is
to collect them partly due to the ‘difficulty’ involved in their effective collection,
an uncooperative judiciary and laziness on the side of the administrators who
prefer to recline and wait for “bags” of statutory allocations that has become,
more or less, the only source of their revenues. This is despite the
over-staffing of most local governments due to pressures for employment that is
hardly available outside the public service. Since there is too much personnel that
is not even carrying out the work of a relatively fewer support-staff that
public offices actually needs, the statutory allocations end up paying staff
salaries rather than financing the very services for which the local
governments where created. Such services include establishment of healthcare
centers, provision of portable water supplies, building feeder roads, schools
and electrification.
The implication of overlooking the non-oil
revenue sources by the state and local governments is that those tiers of
government don’t work and only wait for the subvention that comes from Abuja.
I once asked a friend who is a staff of the
local government service why tax revenues are hardly collected. His responds
was that the field staff got fed up going out to the field to generate these revenues
only for senior officials to steal them through bogus financial claims. According to him, it becomes even more painful
when salaries cannot be paid the moment the statutory allocations are late or
inadequate.
Besides the developmental significance of
tax collection to any tier of government, its significance can also be seen in
the discipline it instills in citizens, especially the youths who will learn
that once you are an adult, you must have a commitment to your nation, that you
don’t live in a nation for free, even if it means paying for the air that you
breath.
