Encouraging TaxPayers in Nigeria: My Idea
Undeniably, the Nigerian government has been faced with a policy paradox; on the one hand, there is the knowledge that citizens would, owing to the economic recession, be unwilling to fulfill their civic duty of tax payment. On the other, taxes are highly needed in curbing and eliminating the recession; they are needed now more than ever when they are most inconvenient to pay. Primarily through autochthonous spectacles, this essay would discuss the means of encouraging tax payment, the problems facing taxation and ultimately, the best ways of implementing the said means.
To William Blake “truth can never be told so as to be understood and not be believed”. Reasoning from this perspective a logical implication of adequate explanation of reasons behind taxation would produce a degree of increased cooperation with the government. Rosenberg suggests television ads showing some of the ways the government uses our taxes: jet aircraft, safe drugs etc. consequently, tax payers are encouraged to pay as a matter of nationalism and it checkmates Leandra’s postulation of the knowledge of tax gaps leading to tax evasion. Equally advocated here is an absolute simplification of the concept of taxation and its necessity with an end result of learning materials containing earnest relatable taxation for dummies. In terms of simplified tax laws and a relatable tax system the use of apps and most recently bots which the BBC considers much more effective in tax enquiries maybe employed for the more literate population while the use of mobile devices by tax collectors themselves as applicable in Osogbo may be employed for further ease and simplification. Nevertheless, is only practical where there are progressive policies necessitating tax payment already laid down by government; otherwise tax collectors would always stumble when asked about the utilization of the taxes.
Historically, in Nazi Germany, controlling education was a way of indoctrination and a major tool by which the Nazis’ racial policies were promoted and implemented. The idea that the malleable minds of children can easily be imputed with ideas which they would grow up to imbibe has been given credence in numerous scientific researches and even John Locke’s blank stare theory. Inferably, government should incorporate tax education into primary and secondary school subjects and emphasis the necessity repeatedly. A snow ball effect could be increase tax payment by parents who wish to lay good examples for their tax precocious children.
Rousseau almost prophetically envisions Nigeria when he quips “We must powder our wigs; that is why so many poor people have no bread”. Currently, increase in the taxation of essential commodities would yield manifest absurdities; however increasing the taxation of luxury goods should not lead to significant decline in consumption as increased cost of living has not been much of a bother to the rich given the existing wealth gap between the rich and the poor. Premised on the existence of positive price elasticity such Veblen goods should in theory have increased consumption. Nevertheless decline in consumption puts the government in a win-win scenario as local industries producing same would be given the opportunity to thrive.
Analytically, Nigerians actually do pay more fees than required by government. The problem however, is the pockets into which they are paid. The menace of illegal tax collection on roads by officers and other criminals becomes more pronounced with a gross underestimation of a daily two million naira lost in an average state. This is bereft of the illegal charges on traders made by self-appointed overlords and area boys as most observable in Lagos. A direct impact of curbing the collection of such would be increased trust in the government and increased real income of taxpayers who are now able to conveniently pay current taxes and even meet future increase. The most suitable way of implementation would be that embraced by Anambra state in establishing an agency responsible for hunting illegal tax collectors. Additionally, it is advisable that patrols by such agencies should not be undertaken in uniforms and their numbers kept small. The most brilliant initiative however, was the provision of a hotline to report illegal tax collection.
Stereotypically, though true activities inescapable for Nigerians may also be exploited in form of increased taxation of religious institutions; in which case the impact of the tax is not directly felt by the taxpayers who pay fixed amounts as offerings. Taxes could also be integrated with the ad infinitum Nigerian ceremonies. An example; the recent convocation in OAU in which an unconventional fee of #500 was required for entrance; surprisingly, it was gladly paid by the ecstatic parents who more than anything were there to celebrate and spend lavishly. On another note, harmful or addictive substances could also be highly taxed as they defy the laws of demand and supply; it is improbable that much reduction in consumption is recorded. In case of a decline, it is a win-win as reduction of their consumption are government objectives.
Taxation in Nigeria through the giving of incentives in form of tangible, perhaps consumable commodities upon payment of taxes could be made a carrot and stick approach. The commodity could perhaps be an essential one which the tax payers would have had to buy on their own or would have had difficulties in getting. Potentials exist in the supply of standard agricultural produce to tax payers. Though tasking, it affords government the opportunity to delve into agriculture, create standards for produce, reduce importation, setup price indirect barriers and ultimately fulfill the sine qua non of pursing the welfare of citizens.
In conclusion, premised on Allingham’s economic theory of tax evasion postulating the evasion of taxes by all rational taxpayers if the penalty is lesser than the gain, other methods which involve more stick than carrot such as increase in the penalties for tax evasion and publication of cases of such enforcements by the FIRS may also be used. All hands and methods must thus be on deck if we would indeed ensure what Sir Holmes calls the price for the civilised society.