Sunday 29 May 2016

Battered Education, Bleak Future… Can Tax Justice Fund Quality Education?

 
A typical classroom in a low income school in Lagos. Photo Hannah OJO
There is a fascination to the story of Nigeria’s soaring mushroom schools which are often housed in cubicles and dilapidated structures.

If there is a place where a stubborn sense of hope defies the logic of reality, it is Adenike Memorial Nursery/Primary School, Bariga, a private school in Lagos, Nigeria.  The vision of the school contained in a cardboard pasted on the wall in the drab looking office of the head teacher reads: “To ensure that our pupils are best in school academic throughout Lagos state. Also, to prepare our pupils for future(sic).”
Vision of Adenike Primary School, Bariga. Photo: Hannah Ojo

To a visitor calling on the learning facility for the first time, the state of the structures did not seem to synchronize with the school’s avowed vision.  The infrastructure needed for the implementation of the lofty ideals needed for the avowed vision of the school is simply not in place. The classrooms were partitioned with planks. The fans were not working and there was little space for children to play.

Another Lagos community where low cost schools thrive as a result of lack of a school structure is Otodo-Gbame in the high brow Ikate area of Lagos. Theirs is a case of poverty in the midst of plenty as there is no government school to cater for the over 2000 children living in the community.

Other than poverty and diseases, many of the children in Otodo-Gbame are also missing out on education. On the two occasions the writer visited the community, many of the children who are of school age were playing around their home surroundings.  Those in the early teens were seen at the shore of the lagoon struggling to catch some sea food.

Despite the huge population and the large expanse of land in Otodo-Gbame, only two run down schools cater for the educational needs of the children.  For those who are privileged to attend school, they do so in tattered uniforms with no sanders or stockings. One of such school is Olutimi International School, a low cost nursery and primary school where children pay N50 daily for tuition.

Mr Olamide Edun, who founded the school two years ago said parents are beginning to show interest in sending their children to school as a result of the influence of the fine houses and cars they see when they go out to the community to transact businesses.  He however, lamented that the enthusiasm is not backed by purchasing power, since some of the parents find it difficult to pay the N50 daily tuition fees.
A school in Otodo-Gbame

According to UNICEF, Nigeria’s exponential growth in the last decade has put immense pressure on the country’s resources and overstretched public services and infrastructure.

“With children over 15 years of age accounting for about 45 percent of the country’s population, the burden on education and other sectors have been overwhelming. Forty percent of Nigerian children aged 6-11 do not attend any primary school with the northern region recording the lowest schools attendance rates in the country”, a quote on the UNICEF website on Nigeria reads.

Nigeria is said to be one of the countries with the highest number of out-of-school- children. With an economy going into recession and lack of purchasing power which left parents patronizing sub-standard schools in order to save cost, there is no doubting the fact that many more children could be faced with a bleak future.

Can tax justice help? Yes is the answer!
It has been said that a fair tax system could enable the unavailability of public services and social protection like schools and hospitals.

A fair tax system can also reduce inequality. The availability of quality education is one of the weapons that can fight inequality. With quality education, people are able to reach to the height of their potentials and create wealth to alleviate the suffering of their immediate families. That way, more people would be empowered and the cycle of poverty can be broken.


Already, Africa has had enough of wastage and underdevelopment which is brought about by the tax incentives given to businesses and investments operating on the African soil. ActionAid, an international organization leading the fight for tax justice estimates that elimination of corporate tax incentives in developing countries could raise over US$138 billion. If US$138 billion is invested into our educational system, imagine the effect on a continent which hosts the greatest number of the world’s out of school children?

Recently some Nigerian politicians were listed in the #Panama paper leak. This further serve to give credence to the reality of tax avoidance and evasion, one of the evil tactics used by a privileged few to further impoverish our continent.

ActionAid  peg the money lost in tax avoidance and evasion in developing countries to be between US$120 and US$160 billion a year. This is more than what developing countries receive in aid.

If it is indeed true that the over US$138 billion (the amount currently given away in corporate tax incentives) could pay for the education of 57 million children currently not going to school, there is no denying the fact that Africa can be set on a better future if both the government and the citizenry pay more attention to tax justice.
Education is a right, not a privilege!

Sincerely, 
Hannah Ojo


Sunday 14 February 2016

Why Tax Justice Should Matter?


 I was discussing with Gilbert Alasa, a PR executive and I asked his opinion on what tax should achieve in the society. He gave an expected reply: “In my estimation, when I pay tax, I am investing in Nigeria. My expectation is to see that investment reflected in our schools, our rail system, our bridges and also   preserve our natural resources and ensure my safety.”

He goes to add: “I want government to use my tax to foster a social value chain that supports my dream and my ability to compete and hold my own anywhere in the world,” he concluded. A lofty ideal isn’t it?  Does it appear to be an elusive concept?  It should not be if we happen to get our acts right.  

Again I went on to ask another friend, Femi Olutade, an online retailer who in recent time has been consumed with a passion to see accountability on the part of the rulers to the ruled. He expressed his views thus: “Tax is not a charity or a free gift but a way of giving to the government. It is part of our income to develop the country, so if tax is not used for the intended purpose, it cannot be justified.”

 It happens that many times when we don’t get value for service and the government does not provide an enabling environment for the enjoyment of our civil, political and economic right, we are wont to lament “but I pay tax”? In as much as that is an aspect of justifiable lamentation, there is an aspect of tax justice we are not paying much attention to, which in my own reckoning boast of more dividends for development in Sub-Sahara Africa.  This is the tax holidays granted foreign investment by the government of most African countries.

So we have seen the furor generated over the 2016 budget in Nigeria and the anger with which tech savvy Nigerians condemned some of the items proposed in the inflamed budget of “change.”
I believe this type of “holy anger” unleashed on the budget would go a long way in creating the change we want to see if we can pursue tax justice on foreign investment with the same vigour. There is no better time than now to pay attention to the tax policy included in some of the foreign investment operating on our soil.  If we don’t, poor individuals risk being overtaxed in this period of austerity where even recharging a phone through online bank transaction carries a tax duty. 
Albeit, at this juncture, I believe it is best to raise some bullets on why we should place a premium on tax justice for foreign investment.  This brings me to the whys:


·      ***  Because Nigeria lost US $3.3billion as a result of an extraordinary ten year tax break granted by the Nigerian government to some of the world’s biggest oil and gas companies namely Shell, Total and ENI.  ( if in doubt, read the ActionAid report titled Leaking revenue: How a big tax break to European gas companies has cost Nigeria billions).

·     ***   Because US$3.3 billion is the equivalent of twice the Nigerian healthcare budget for 2015 in a country where 15 out of one hundred children die before their fifth birthday.

·      ***  Because an 11 months old investigation by PREMIUM TIMES revealed that the telecommunication giant, MTN shipped billions abroad, paying less tax through a complex but notorious tax avoidance scheme called Transfer Pricing.

Back to the matter - tax justice! If there is a time Nigerians ought to pay active attention to the issue of tax justice, it is now.  Now that price of oil has dwindled in the international market. Now that austerity times are here, because of falling oil prices. Now that the debate on alternative revenue sources has suddenly acquired a strident and interesting tone with one  of our senator,  Chief Whip Olusola Adeyeye (APC Osun Central) saying we should turn to taxing farmers,  text messages and beverages to fund the budget.

We should pay attention to tax justice as much as we do to European football leagues and entertainment trends. The perils of these times demand it. We all should join hands to demand that tax incentives must be based on a thorough analysis and a proper assessment of the impact on poor and vulnerable groups.  Let’s demand that consortiums for foreign investment should be made open for scrutiny and public deliberation. Aside being one of the oldest ways to redistribute wealth, tax is the most sustainable way to finance public expenditure. For this, tax justice should be important to us. Place  a premium on it!


Sincerely, 
Hannah Ojo