TAX, TAX AND MORE TAXES: MUST GOVERNMENT RIDE A WILLING HORSE TO DEATH?

ZION B-BC   NEWSLETTER.  

(Looking at Nigeria's Political System From a Godly Perspective).

A Publication of the Zion Faith Bible-Believing Church Kpeyegyi Abuja Nigeria {Vol. 8.NO 321. 6th October, 2019.} “…ONLY The Truth, Will Set You   Free! (John.8:32). . PRAY & FAST EVERY WEDNESDAY TO STOP BLOODSHED IN NIGERIA!

TAX, TAX AND MORE TAXES: MUST GOVERNMENT RIDE A WILLING HORSE TO DEATH?

[In commemoration of Nigeria’s 59th Independence Anniversary.]

It is true that the Nigerian government is backed by law to collect taxes from its citizens for the purpose of fulfilling social contracts in governance but the legal document did not insinuate in any form that official taxation should be exploitative or punitive against the governed!

With the recent flurry of fresh taxation of virtually every aspect of social life: first, it was the government's plan to increase Value Added Tax (VAT), from 5% - 7.2%, because Nigeria's VAT levy was the lowest in the world! But the protagonists of the new tax drive did not bother to carry out painstaking researches to discover the enormous economic advantages that accrued to the citizens in climes with higher VAT! With the current 5% VAT regime, can past and present administrations point to any benefits that have accrued to vast majority of the populace of which government is the sole beneficiary?

A value added tax (VAT), is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed. 

In Nigeria, VAT is payable on goods and services consumed by private concerns, business entrepreneurs, government agencies etc! However, some agricultural produce/fertilizer, pharmaceutical/medical equipments, including commercial vehicles/ spare parts, diplomatic baggage, etc, were exempted from VAT!

NEGATIVE EFFECTS OF NEW VAT REGIME!
The fact remains that although government would enjoy buoyant revenue to cater for various strategic infrastructures and other special intervention programmes through the tax increments if such funds were managed by righteous officials; but on the other hand, products and services that are not VAT exempted would attract serious inflation that would further deflate the purse/purchasing power of the average income earner as they would purchase what they could only afford! By implication, the formal sector of the economy - especially the SMSE's will suffer significant patronage which in turn will be counter- productive for an economy which is consumption-driven!

An Investment Researcher, Mr Robert Omotunde, in a radio interactive programme, stated that Nigeria's GDP as at 2018, stood at 78% of consumption expenditure adding that if government taxed that percentage at 5% VAT, the country should have earned N4.7 trillion in VAT, but that it got only N 1.2 trillion instead!  It is obvious that the Economic Advisory Council (EAC) should waste no time to advise the President against the imminent danger posed through the proposed VAT increase as it would produce human vultures ready to predate the common patrimony!
Nigeria should expand its TAX NET to the RICH and the AFFLUENT and also to non-oil revenue base in order to spare the poor masses of further economic agonies!

TAX SHOCKER FROM CENTRAL BANK OF NIGERIA (CBN)!
And while the organized Labour Unions/masses, Civil Society Organizations/NGO's who hold the short end of the stick expressed resentment and outright condemnation over the proposal, a SECOND SALVO was released by the Central Bank of Nigeria (CBN), through a tax shopping list which would fleece the 40% bank-friendly citizens through new tariffs on deposits/withdrawals - manual or electronic transactions at unbelievable percentages! According to Governor Godwin Emefiele, CBN's new policy on increased tax collections was introduced to ensure greater financial inclusion for increased economic growth and that only 5% of bank customers would be affected! Is CBN not contradicting its CORPORATE SOCIAL RESPONSIBILITY PORTFOLIO?

LEGISLATIVE INTERVENTION SHOULD HOLD SWAY NOW!
From all indications, it is very unlikely that the Senate which must review the VAT Act Cap VI LFN2004 (as amended), would assent the planned increase by government in order to avert further hardship on the meagre income of the poor masses, in spite of the fact that the Federal Executive Council (FEC), meeting of 11 September 2019, approved the increase for its consideration! In Nigeria, governments at Federal and State levels, are empowered to tax several items, commodities and services as stipulated under Legislative Powers of the Second Schedule - Parts I & II - Exclusive/Concurrent Lists. There are 68 "controversial" items on the exclusive list under the purview of the Federal Government and Sections A-L in Part II, which are exercisable by both Federal and States Government.
* The National Minimum Wage was yet to be implemented nationally - except by Kaduna State which paid its workers the agreed amount at the end of September, 2019! WHY PUT THE CART BEFORE THE HORSE BY FORCING ADDITIONAL VAT AT THIS AUSTERE TIME?
* Who would VAT favour - rich or poor? Definitely, the RICH who have more than sufficient funds to shop anywhere all the time!
* Must government become taxaholic on the poor masses rather than the rich and the affluent who are pathetic tax dodgers and tax evaders? NO!

The Constitution of the Federal Republic of Nigeria 1999 states without ambiguity in Chapter II Section 2 (a) (b) (c), as follows: (a) " sovereignty belongs to the people of Nigeria from whom government through this Constitution derives its powers and authority." We will stop there for brevity!
Section 24 (a) (b) (c) (d) (e) & (f), of the same Chapter also clearly spelt out Duties of the Citizens; but for the purpose of this work, we will restrict our analysis to (f), which specifically urged the citizen: "to declare his income honestly to appropriate and lawful agencies pay his tax promptly." Are the Nigerian affluent TAX-FRIENDLY? NO!

THE GREATEST ASSET OF ANY NATION IS ITS PEOPLE!
Nigeria is not an exception to this global conception which classifies the people as power house, engine room, workforce, the golden goose that lays the golden eggs etc, etc; from whom governments derive not only their POWER but also their LEGITIMACY and MUST therefore handle them with the greatest care and treat them with utmost respect and dignity! Governments should never forget that a people could make or mar the nation's development, peace, economy etc, depending on the kind of leadership that navigates the ship and the economic team at the helm of affairs!

TAX DRIVE NET SHOULD BE SPREAD TO CATCH MILLIONS OF RICH EVADERS!
Statistics have proved that only 40% of Nigerian taxable adults actually fulfil this constitutional obligation, while the very rich and wealthy form the bulk of evaders whether it is direct or indirect! DESIGNATED CONSTITUTIONAL TAXES: VARIOUS FORMS OF TAXES IN NIGERIA - INCOME TAX, VAT, BANK TAXES, COMPANY TAX, ROAD TAX, PORTS TAX, ETC, SHOULD NOT BURDEN THE POOR ALONE!
*WHAT ABOUT THE PROPOSED RE-INTRODUCTION OF TOLL GATES ON FEDERAL HIGHWAYS WHICH WOULD BE  COUNTER-PRODUCTIVE AND TANTAMOUNT TO DESTRUCTION OF THE GAINS AGAINST CORRUPTION, KIDNAPPINGS, ARMED ROBBERIES, VIOLENCE, BLOODSHED AND TERRORISM IN NIGERIA?
*MULTIPLE TAXES BY FEDERAL AND STATE GOVERNMENTS IN NIGERIA MUST BE ABOLISHED BY THE BRAND NEW ECONOMIC ADVISORY COUNCIL (EAC)!
*SIX NIGERIAN BILLIONAIRES CAN ERADICATE POVERTY IN THE NATION! Whistle Blowers should come to our rescue and fish them out! After all, they made their billions from this great country!
*CAUSES FOR DESPERATE TAXATION; DEFECTIVE CONSTITUTION, SOURCING OF MONTHLY FUNDS FROM FEDERATION ACCOUNT BY STATES; DELIBERATE REFUSAL BY GOVERNORS TO GENERATE FUNDS INTERNALLY (IGR's); FAILURE TO EXPLORE & EXPLOIT NATURAL RESOURCES THROUGH EXTRACTION - OUTSIDE OF CRUDE OIL!
*AJAOKUTA STEEL INDUSTRY, KOGI STATE – ESTABLISHED IN 1979, HAS BEEN ABANDONED UNTIL THE VERY RECENT RUSSIAN INTERVENTION – WHICH HAS REQUESTED FOR URGENT ESTABLISHMENT OF A SEA PORT AT LOKOJA, NIGER STATE AND RAIL LINES TO TRANSPORT HEAVY IRON PRODUCTS FROM THE PLANT TO OTHER LOCATIONS FOR INDUSTRIAL PURPOSES AND EXPORT!
*ALL EFFORTS MUST BE HARNESSED BY FEDERAL AND STATE GOVERNMENTS TO GENERATE FUNDS FROM NATURAL RESOURCES IN ORDER TO RELIEVE THE POOR MASSES FROM TAX OVER-BURDEN!

CONCLUSION OF THE WHOLE MATTER!          
New Tax ID: FG directs CBN, others to synergise with the Joint Tax Board. The Federal Government has directed the Central Bank of Nigeria, Nigeria Interbank Settlement System, the National Identity Management Commission to cooperate with the Joint Tax Board in the release of relevant individual records! What does this mean to the Nigerian taxable adult? The end of multiple taxation on his meagre take-home-pay is in sight!
WHO SAYS PRESIDENT BUHARI'S APC GOVERNMENT IS NOT ON COURSE? When the righteous are in authority, the people rejoice: but when the wicked beareth rule, the people mourn. (Prov 29:2)

Please look forward to more divine revelation in the next edition of Zion B-BC Newsletter as you share this with friends and remain blessed in the Lord. [For weekly access, to this newsletter, log on to:  facebook.com/zionfaithbible.believingchurch or http://www.zfbbc1.blogspot.com, https://www.google.com/+zionfaithbiblebelievingchurch.

If you have not accepted the Lord Jesus Christ as your personal Lord and Saviour, don’t miss this great opportunity as you pray this prayer: Lord Jesus; I confess that I am a sinner who needs to be saved through the grace of the New Testament of your Blood, shed on the Cross at Calvary; I renounce every sin in my life and accept you as my Lord and Saviour. Please forgive me and write my name in the Book of Life. Amen. If you prayed this prayer, you have been admitted into the family of sons and daughters of God, who are born-again. Congratulations.

I am, yours sincerely, Dr. David B.A. Olufon, Resident Pastor and Editor. 08130669886, 08098194390.  08080243066. G-mail- dvdolufon@gmail.com.