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Understanding Edo New Tax Regime (2)

By Erasmus Ikhide
 Published May 17th, 2009

If we do not redefine and reposition our tax system holistically for altruistic governance today through payment of tax by taxable individuals in a world that has turned its attention to bio-fuel and other sources of renewable energy, we run the risk of doing so tomorrow with a hasher measure under a tougher condition after all the oil wells have dried up. The nation oil reserve which took about 65 million years to form, now being exhausted to about 35 billion barrels, might dry up between now and 35 years, going by the production of three million barrels per day.

The question has been severally asked and, I repeat: why do many people in Nigeria and Edo State that have seen hundreds of millions of billions of Petrol Dollars over the years remain perpetually stuck in the web of irredeemable poverty? How can poverty abate when the billions from oil revenue could not be used to improve education, reduce crime, alleviate poverty and build infrastructure on the account that it is freely gotten from beneath the earth? Rather than use the oil wealth to change the society to an unprecedented level of development – I mean the ‘roaring’ years of oil boom – it became, regrettably, the unviable sour on which insecurity, unemployment, militancy, decayed infrastructure, epileptic power generation, dearth of public healthcare delivery system and abandoned public schools festered.

Needless to say that oil wealth breeds corruption, internal rivalry and unbalanced economy and fosters lack of transparency and accountability. The problem of persistent poverty is mainly attributed to lack of visionary leadership who find its way into the corridors of power on the account of its firepower. Unless we right all the wrongs of these miss-normal processes through popular elections, through selection of our leaders in whom the people will decidedly entrust their common goods – their tax earnings – we will remain victims of this circuitous poverty of the mind and stomach. Oshiomhole’s people-centered administration is premised on the development of human capacity as a way of re-engineering the mechanisms of governance for the benefit of the mass of the people through progressive taxation, akin to the 7 principles wealth redistribution. Wealth redistribution is all about spending the collective resource in the protection of life, provision of Social amenities which no single individual can afford for all.    

The fear of the people of Edo State like the other states of the Federation, to say the least, is not unfounded. Apart from the fact that paying correct tax is almost new to the people both in private and public sectors as a result of tax invasion; and that they have not be properly absorbed into confidence building before now, they have the problem of trusting politicians with their had earned money in spite of the extant laws as regards with taxation. The only way to forestall the increase of organized crime is for us to pay our taxes so that jobs can be created since the free money may never come as it were.

As they say ‘‘if we did not benefit from the oil boom and the oil windfalls while it lasted why should we be made to pay tax to the same government – not this one – who has shown contempt to their plight?’’ This is quite clear. Oshiomhole-led administration came on board on the popular mandate of the people who have sought a break and a change they can fathom away from the ineptly corrupt governments right from the polling boot, which careless whether the needs of the people are meant, in spite of the stupendous oil wealth.  Now, the oil wealth went down the drain because we lack sensible, dedicated and concerned leaders that are products of participatory democracy.                   

Now, the implication is that less and less of monthly subventions would come from Abuja , the nation’s capital city that has gobbled the largest chunk of the oil wealth than those places where the resources are being baked. Shall we then tell our people in every stratum of the state runs institutions to go home that the state has collapse, since it could no longer afford its obligatory responsibilities of harnessing resources for the good of greatest numbers in the larger interests of the people? Or the government should throw up her hands in helpless expression of her failure over tax matters that are settled constitutionally so that the urbane festivities of leeches can continue?

Taxes are the price citizens of a nation pay for the goods and services they collectively provided for themselves and for others. It is the fundamental part of actions collectively taken by citizens through democratically elected institution called government. Almost always, everyone – other than a few tax invaders – recognizes that taxation strikes at the cord of human pride as the contributory sum of their earnings towards egalitarian society worthy of habitation. If you are really concerned about long-term deficit for which the state has been deliberately plunged, you will have no option than to support the new tax regime.

The new tax system is based on a sound intuition as it will not fall under a hail of fire like the hundreds of billions of Petrol Dollars in the previous administration that used same to minister to the greed and the of the vanity of their godfather. There is no other way Edo State can raise that money. Some people want the new tax system to be killed to spite Adams Oshiomhole-led administration. Fine, kill it. But with what are we going to savage the near pariah state of the state’s infrastructural decay that need total overhauling? Oshiomhole’s across-the-board taxation is the easiest way to raise the money to cushion the effect of economic woes. This will be done progressively. The tax would be paid by those who can afford to the extent of their capability.

Oshiomhole has come right out: ‘‘bemoaning economic crunch of the state will not take her away from the stack realities that have bedeviled the state all of a sudden’’. Coupled with this near intractable global economic meltdown is the very demanding desire of the people to be rewarded, rightly, for standing by the Comrade Governor through the tick and thin of his electoral travail. How can we afford to meet the rate of infrastructural development in the face of dwindling Petrol Dollars without the sour answer of taxation to crop out the required for funds?

Even at the heart of economic strangulation, oppressive taxation is not in contemplation since Oshiomhole-led administration is anchored on a freely given popular mandate which has eluded the good people of Edo State for years. In the same token it should be noted that not much can be achieved if we kept clamouring for a total performance while maintaining the status quo on freebies – which even the elites have insolently derailed – to everyone’s disadvantage. Taxation on its own tends to keep inflation demonstrably lower, which creates pressure for less wasteful engagement and therefore more efficient use of public funds.

Come to face it: there is no government that will be willing to cut the budget enough to contain the deficit without a general tax increase down the road! With this as a matter of course, this government will be able to deliver the goods within the next short possible time as expected.

Erasmus Ikhide is a Senior Special Assistance Media Affairs to Edo State Governor Adams Oshiomnhole.

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