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