This is not
an academic or professional article about what IGR or taxes are. We already
know what they are and the role they play in governance in any country. This is
more about our leaders’ attitude and approaches to implementing them
effectively, such that they will be more publicly understood and acceptable.
On the back
of recent economic woes that has befallen the states in Nigeria, and the
Federal Government, several state governors seem to have woken up and are gradually
coming to their senses and the cries of the need to increase, improve or, for
some, establish Internally Generated Revenue (IGR) and taxation in their
territories have suddenly dominated their statements to the public through
press interviews, projects commissioning and workshop opportunities. In most
cases, these erstwhile profligate and corrupt politicians are speaking through
the sides of their mouths because they either do not know what they are talking
about or they are playing up to the gallery to cover past misdeeds and to
appear to the public that they are still there with the knowledge of what to do
about their ailing and moribund economies.
In saner and
more civilised countries, where decent politics, democracy and good governance
have been embraced by all, both leaders and followers; IGR and taxations are no
longer issues; they are normal governance procedures. The leaders who are
elected do not need to chase after IGR and taxes; these are already in place to
support them in delivering the goods to their people. And the people from who
these are collected are assured that whatever is collected from their salaries,
business profits and other incomes will be used altruistically and suitably for
their benefit and not corruptly for those they elected or are appointed to rule
them.
These two interconnecting
facts do not exist in Nigeria. People, perhaps understandably, do not want to
pay taxes and contribute to IGR because of the ingrained perception that such
money extorted from them will disappear into the rulers’ pockets to fuel
inordinate wealthy lifestyles, and even worse, to oppress them. In fact, we see
the evidence every day in the way our elected and appointed officials behave in
public, internally and outside in the wider world.
Herein lays
the dilemma for both rulers and followers – lack of trust, lack of credibility,
lack of sincerity, lack of purposeful leadership and lack of trusting
followership, as well as an ignorant, indifferent and unsympathetic public. A
dilemma or difficult circumstance of our own creation from which there seems no
escape because of mutually conflicting or dependent conditions - dubbed "a
catch-22 situation".
A little
digression: Just a few months ago, a local government chief executive sought my
advice, and a possible contract for me, on exploring and exploiting new sources
of IGR in his local government area, as well as improving on what little they
already have. I came back to him after one month with just four pages of comprehensive
and implementable ideas, including new sources and execution methods that will
pay the salaries of his staff; will reduce dependency on the federal or state
allocations so that the federal handouts will be released for developmental and
other local authority projects. He was ecstatic, but unfortunately for both of
us, for me on a business consideration; he told me his governor did not warm to
the ideas. I know what he meant. There seemed to be not enough money in the
ideas to benefit his “oga”.
Then
recently, the governor of the State of Osun proclaimed that he is recruiting “Tax
Marshals” to boost the revenue base of the state. Remember the State of Osun
was the worst offender that failed to pay the salaries of his workers for
almost eight months, before the federal bail-out came, and even now is still
owning many month’s unpaid salaries, and not very sure of its ability to
continue paying the salaries. Who or what is a Tax Marshal? I will let him
answer that, but I sure hope it is not like that of Lagos State, where they say
over 25% (please don’t quote me, the figure is always varying, because nobody
knows the true figure) of the taxes and revenue collected goes into the tax consultant’s
pocket in fees.
A friend then
wrote me: "The challenge for Osun
is to create jobs and attract investments, first and foremost. Without jobs,
organisations, factories, shops, or commerce there will be no taxes to collect.
As a matter of fact if you recruit 'Tax Marshals' who go about intimidating
entrepreneurs, prospective investors are driven away.
To encourage investors, your tax
regime must be liberal initially as well as competitive. Knowing Osun and
Nigeria, these civil servant 'Tax Marshals' will be underpaid, owed months of
unpaid wages, will have no other alternative than to demand bribes from
shopkeepers, companies, factories or other organisations.
When Awolowo and the AG developed
Ikeja, Ilupeju and other industrial and commercial estates, the tax regime was
initially low. Lagos state is now the biggest beneficiary of Awolowo's
foresight and investment. The industries and commercial concerns are tied in
already. So Lagos State could impose stricter tax regimes.
Has [Governor] Aregebesola created
investment, industrial or commercial bases [and enabling environment] in Osun
yet? Is Osun attracting investors? Let Aregbesola lay the foundation like Awolowo
did, then Osun will gain the tax benefits in the future". (Olukayode Nathan)
Furthermore,
development initiatives are not about just the federal allocations or IGR. It
is about developing the human capital through applicable education, skills
development, providing basic infrastructure; portable water, electricity,
transportation, roads, telecommunications and in these days the Internet. Any
government not addressing those developmental initiatives is a failure. Any
government not providing good education to the youths is a disaster no matter
how big the IGR.
Are the vast
majority of children achieving in schools and colleges? For Lagos and Akwa Ibom
or any other state, the answer is NO.
Are the state
governments providing for the health and welfare of their people? The evidence
show there is lack of basic infrastructure; lack of portable water, health
facilities, lack of sewage facilities etc. in most parts and indeed the rural
parts of both Akwa Ibom and Lagos states, or any other state in Nigeria for
that matter. So both states like all other states fail the test.
We need to be
objective rather than defend ineptitude. None of the governors or public
officers in those states would send their children to their public schools including
the universities, and as we often see, they and members of their families will
use the state-built hospitals for medical care. A good and poignant example is
that of former Akwa Ibom State Governor, Godswill Akpabio, now a senator of the
Federal Republic of Nigeria, who had claimed and shouted to the rooftops during
his tenure as governor that he has built a “world-class hospital” only to be
flown abroad for treatment of minor injuries he sustained when he was involved
in a car accident in Abuja a few months ago. How do we explain this incongruity
and hypocrisy?
The problem
is that our politicians never think of legacy building; they never think of
building and erecting foundations for the future or for the next generation.
They are very myopic, and do not see beyond their noses, all clouded by greed,
self-interest and thievery. They want it
NOW, during their tenure, mainly because of the profit in kickbacks and bribes and
the exaggerated glory that will come to them during their tenure only.
"What do I care about the next government or the next generation?” that is
their thought.
That is one
of the main reasons why the development of our industrial, infrastructure,
investment and commercial bases are so poor. They make no attempt to leave some
legacy behind; no continuity of purpose and governance. Even in the same
political party, a new incoming governor or local government chairman wants to
start afresh, just to make his own money and empower a few family and friends
and then proceeds to dismantle and discard the little that his predecessor
managed to do.
It is very sad,
this phenomenon. With so many dearth of ingenuity and resourcefulness from our
so called leaders, it is no wonder most states are in distress in Nigeria and
go begging, cap in hand for the Federal Allocation in Abuja, out of which they
even embezzle most.
Fiscal
federalism or autonomy is a very long unachievable dream in our times, if the
mind-set of both rulers and the ruled stay primordial and suffocatingly
corrupt, because the revenue allocation formula in Nigeria inevitably
encourages parasitic governance where states become relaxed and endlessly
expectant of the monthly ritual of allocation from the federal government.
According to Dare Arowolo, a lecturer in the Department of Political Science
and Public Administration, Adekunle Ajasin University, Akungba, Ondo State, the
implication of this is that while the allocation formula limits the capacity of
states to provide public goods needed to promote and sustain governance, it
also predates on the Internally Generated Revenue (IGR) of each state, thus
making the states perpetually dependent on the Federal Government.
The surest
way to at least partial fiscal federalism by both the states and local
governments not only lies in an altruistic approach to generating internal
revenue but also a sincere and holistic will and commitment to using the income
so generated.
In a way, we
should be happy that the mind-sets are changing, but why should it be only when
reality has set in; only when the price of crude oil, which we have depended on
for so many years that we have neglected other sources of revenue, has fallen
to very economically-dangerous levels?
We are in it
together!!!
Akintokunbo A Adejumo MSc, Dip Mngt, CIHM, MCMI, FITP, MIH
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