Tax As Alternative Revenue Earner In The Face Of Dwindling Oil Price By Tony Momoh
Taxation is a means of generating revenue by government for the purpose of providing social services to the people. Taxation all over the world is a function of reciprocity. While the government owes it as a duty to empower the citizens by providing jobs, infrastructure and other development projects, the citizens are usually expected to reciprocate by performing their own obligations, principal of which is payment of taxes. Revenue generated from citizens’ taxes is usually recycled by the state (government) in the area of provision of basic amenities such as water, roads, electricity, schools among others.
The question to ask is, how efficient is Nigerian’s tax collection system? In cases where we have an efficient collection system, what about the management and administration of the collected taxes? Does the revenue accruable from the taxes deployed towards the rapid infrastructural development of the country?
The new reality is that government at all levels has to raise the bar by embarking on an aggressive tax drive, considering the dwindling revenue profile arising from the fall in oil prices. Therefore, we have to come to terms with the present reality. The President has said that Nigeria is broke, and how do we survive as a nation. The answer is not far fetched as Nigerians must be ready to provide for themselves by embracing the concept of taxation. Taxes come in various forms, ranging from personal income tax, value added tax and companies’ income tax, among others.
The books being presented today offer Nigerians an insight into what is required for the survival of our nation. The book “Tax Laws” has dwelt on rights and obligation of citizens in tax matters. To me it is a compendium of the laws that shape our tax administration and management.
The book has come at a very auspicious period in our nation’s history considering the enormous task before President Buhari’s administration.
It should be recalled that in recent years oil was sold at over a hundred dollars per barrel, but by May 29th 2015 when the present administration assumed office, it had plummeted to below 50 dollars per barrel. Yet the government still has to contend with increasing social responsibilities.
To bridge the yawning gap in revenue accruals, there arose the need for government to embark on aggressive taxation which is the most recognized and plausible means of generating revenue for social services across the globe.
Mr. President’s promise at his inauguration to diversify Nigeria’s revenue base cannot be realized without a well articulated tax laws. I believe that these books will serve the purpose. Information at my disposal indicates that revenue accruable from value added tax from January to June 2015 came to about N376 Billion, but this figure has doubled since July till date. The reason of course can be attributed to the federal government’s commitment towards diversification of revenue sources.
With aggressive tax laws and enforcement, there is no doubt that Nigeria can withstand the shocks of the uncertainties in the oil market. What this means is that there will be more revenue available for the government to cater for the needs of our people.
This is the best time in our history for Nigerians to embrace the tax system. I say this bearing in mind that President Buhari can be trusted and is a man of impeccable integrity. By this, I mean that Nigerians can be involved in the contributory social contract by paying their taxes regularly.
As part of his administration’s economic reform, President Buhari can be trusted to provide the necessary infrastructure that will be commensurate with the revenue generated from tax. It is a win-win situation for both the government and the governed. Our present experience in drop in oil revenue is a clear indicator that to continue to depend on a mono source of revenue will ultimately spell doom for our economy. Therefore, we must commend the foresight of President Muhammadu Buhari to refocus our economic direction to other areas.
I therefore wish to commend the author, Mr Momodu Sule for his rigorous effort and research in producing these highly academic and incisive books good enough for references and academic research works.
Prince Tony Momoh
Yerima of Auchi
Former Minister of Information
And former Chairman Defunct Congress for Progressive Change (CPC)