The Panama Paper saga has made one thing clear; people do not like to pay tax, but would rather keep all their earnings to themselves.
In Nigeria especially, it is only mostly the organized private businesses and public servants that pay tax.
Prof. Douglason Omotor, the Adviser, Business Development unit of West African Institute for Financial and Economic Management (WAIFEM) was a speaker at a dialogue which held yesterday. This dialogue titled Promoting Sustained Growth and Inclusive Development of States in Nigeria was organized by the Forum for Inclusive Nigerian Development (FIND)
Prof. Omotor during his speech opined that Nigerians try to evade tax payment because they do not see value for their money.
In his words, “Nigerians provide their own power, water, security and sometimes they even build their road themselves and so are likely to feel there is no need to pay tax since the government will not provide those things for them. If people don’t see value for the tax paid they will be reluctant to fulfil their tax obligations.”
He also talked about the Principles of taxation, stating that an effective tax system must be just, clear, convenient and inexpensive.
If a tax system helps the rich get richer and leaves the poor worse off then it isn’t just. It should also be easy for tax payers to pay their tax and it should not involve rigorous processes. For any tax system to be considered effective, the process involved in collection shouldn’t be more expensive than the tax revenue generated.
Prof. Omotor called on States to be less reliant on federal tax revenue being allocated to States and should instead diversify the income of their states by shifting away from reliance on oil revenue and looking for other ways to generate revenue and to better utilize the other mineral resources available in their states.
He advised that the only way that states can achieve independence is by getting tax payers involved in the process of taxation and restore their trusts that the tax paid will be used for the benefit of the residents of the state.