In the last one year, I have made three major interventions on Anambra matters: ‘Letter to Professor Soludo’(December, 2021); ‘Soludo on the Driver’s Seat: a A Third Order change, A Big-Bang, Cometh! (March, 2022); and Ghost-Town Strategy, UGM and Reign of Terror: By whom and for what? (April 2022).
I made all these interventions as a Soludoist, onye-Anambra in the local diaspora and as a ‘stake-holder’ in the Anambra Project, even though I do not know how much stake I hold. Today, I am writing as an ‘ancient economist’ who studied economics in one of the best Departments of Economics in the world then (UI, 1980), peopled by top-notch academics from all over the world.
By then, there were no smart phones to calculate IRR and NPV and there were no laptops to design models within minutes. I am Transporters also writing as one who is away from home but is regularly at home, and who wishes that Anambra should be an ‘A-State’
When we agree that taxation is a normal part of the economic system, which we all must contend with, we then move into the next stage of ensuring that taxation does not harm the businesses or the citizens
Anybody who occupies a public office, must surely receive doses of poisonous darts from critics due to what he did or failed to do or due to avoidable slips of tongue. This is normal in a democracy as the official appreciates public opinion and is kept on his toes. This is of limited application in Nigeria where our ‘dealers’ behave ‘Napoleonistcally’, treat the public with disdain and hope to buy and rig themselves into power.
Of course, criticising is different from critiquing. Soludo has received his fair and unfair share of darts form the diverse publics, including those outside Anambra State. However, what interests me today the strident public outcry about Soludo’s tax regime. I know upfront that I will not receive mush applause for this intervention, especially given some recent developments. But I will say it as I know it!
Sometimes ago, ALL Anambra bachelors were advised to quickly get married before Soludo introduced a wedding tax! Before then, Soludo was alleged to have introduced a funeral tax of N100,000. Last week, a group of drivers protested the ruinous taxes imposed on them by the new tax-master (not task-master) in town.
Transporters, foodstuff dealers and petty traders have all protested over the same matter. In a table-top research related to this intervention, I stumbled on two related headlines: Drivers protesting in February 2020 and in September 2022 because of over-taxation in Anambra State.
It is thus probably one of the things that Soludo ‘inherited’ from Obiano Government. Anti-Tax protests also did not start today because one of the war cries of the American revolutionaries was ‘no taxation without representation’.
I also interacted with some people in the ‘village square’ and extracted the following: That there was a sudden hike in the taxes; That tax-collection firms unleashed vicious touts on the citizens; that containers are now charged N30000 apiece, as a result of which they have adopted the Cotonou model (offloading at Asaba) and that Okada, keke, taxi, shuttle and township busses are now charged N300, N600, N700, N1200 daily for 25 days while mini-lorries and 6-tyre trucks are charged N6000 and N20000 to offload and they are also charged for loading.
Two weeks ago, my younger sister made purchases at Onitsha, paid the drivers and had to pay N3000 and N8000, respectively, before the shuttle and lorry could leave the park. I don’t think that the charges were related to the destination, or to the levies on the drivers or paid directly into government accounts as we were assured. In effect, Anambra Tax Protests (APTs) are been caused by tax-hikes, highhandedness of the tax collectors and the reintroduction of touting, into the process.
Some of these concerns appear genuine and require urgent and coordinated government attention. However, my contention is that we must be ready to pay our taxes. When we agree that taxation is a normal part of the economic system, which we all must contend with, we then move into the next stage of ensuring that taxation does not harm the businesses or the citizens.
Nigerians suffer from acute tax-phobia and are experts in tax evasion (as against tax avoidance). Only civil servants pay the taxes, which is deducted at source. Very few businessmen have paid the kind of tax, which the son of man has paid this year. Furthermore, in other places we operate, we pay taxes, including those preceded by the threatening rude ‘owo-mi da’!
Taxation is not new. The stockpile of grains, which Joseph managed in Egypt was the outcome of produce-taxation (‘excess crude account?) imposed by Pharoah. In Igbo-Ukwu, the late and last warrant Chief Umeanadu, so taxed the people that they protested and that was the end of chiefdom in Igbo-Ukwu.
However, taxation contains a fundamental dilemma and inbuilt conflict between the taxer and the taxed. Taxation funds the government but reduces the disposable income of citizens. Thus, while the government wants to tax as much as possible, the citizens want to pay as little as possible, especially in this clime where you need a high-calibre microscope to see what has been done with the money. It is thus imperative to create a delicate balance between these two conflicting interests.
This is the reason why economists have always harped on the principles of a good taxation policy, which Adam Smith identified fairness, certainty, convenience and efficiency. Other principles include empathy, enforceability, proportionality, neutrality and given the Nigerian peculiarities, I am just adding civility.
It appears that most of these ATPs revolve around the issues of fairness/ability to pay, certainty, empathy and civility. Some people are also aggrieved with the resurgence of touting and indiscriminate revenue collection. However, in an era when FAAC allocations have nose-dived abysmally, and when there is a new governor who wants to make a serious mark, we should be willing to pay our taxes.
Read also: Soludo says Igbos can’t produce president in 2023. Really? When can they?
Furthermore, criticisms of the tax regime should also be a little bit more scientific. We should consider the current tax regime with the previous one, and compare with tax-regimes in other Anambra-like states. Again, people are taxed based on certain standard parameters, not on what they would like to pay. So, when people argue that the taxes are high, the question is ‘relative to what’: what they want to pay or to what they should pay?
On the other hand, the government must continuously engage the various tax payers, listen to their complaints, and act with compassion. If the government taxes businesses out of existence, the tax-net will dwindle automatically. I learnt that the government recently declared some categories as tax-exempt.
The process of tax collection should also be civil. Part of the recurrent issues with change and change management is resistance. These ATPs are part of change resistance and the government should deploy the strategic change resistance management strategies in addressing this ‘tax-is-too-much’ matter.
The taxed should also optimise one of the core benefits of paying taxes. In the 82nd Inaugural Lecture at Olabisi Onabanjo University, Professor ROC Somoye asked ‘Where does the money go’? When we pay our taxes faithfully, we have the right to boldly demand accountability by asking: where does the money go? We should also ask whether it went where it should go (our priorities), whether the costing is padded or lean.
As for the government, here is an unsolicited advice. The government can introduce the Anambra Diaspora Support Fund of N5000 monthly. If 2 million Ndi-Anambra voluntarily subscribe to this fund, it will gross N10 billion, about half of 2023 budget, which may be enough to remodel our secondary schools over the next 2 years.
Asking for regular small contributions is better than asking occasionally for fanfare-based, ‘notice-me’, big donations. Of course, this presupposes that it is transparent, has the database, makes visible giant strides, and enjoys the goodwill of the people.
