Every election season in countries well-governed, citizens expect that the policy documents of the leading candidates will contain not only promises but also what would come from their pockets to fund such plans. That is basically what the phrase, “no taxation without representation” connotes since it also presupposes that there can be no effective (and accountable) representation without taxation. But in Nigeria, our people have been conditioned to believe that government is a Father Christmas that dispenses the goodies of life free of charge without demanding anything of citizens.
It is within that context that I will situate the campaign documents of the ruling All Progressives Congress (APC) candidate, President Muhammadu Buhari and his opponent in the main opposition Peoples Democratic Party (PDP), Alhaji Atiku Abubakar. I have read both documents and they lack rigour because there is no coherent funding plan that ordinarily should be tax-based unless of course the essence is to deceive. Given a low revenue problem compounded by dependence on oil, it is not enough to promise infrastructure, which we sorely need, the question is how? By borrowing more from China?
Meanwhile, I understand the predicament of the candidates. Atiku, a very wealthy man who owns a Private Jet, claimed in his Independent National Electoral Commission (INEC) form that he earned only N60.2 million in three years and paid the sum of N10.8 million as tax for those three years (between 2015 and 2017), an average of N3.6 million per annum. Another presidential candidate on the platform of the Social Democratic Party (SDP) and former governor of Cross Rivers State, Mr Donald Duke reportedly earned a combined sum of N5,618,419 between 2015 and 2017 and from that he paid a tax of N400,000, which means he paid an annual tax of N133,000. We don’t even know whether President Buhari has ever paid any tax on his legendary 150 cows that neither increases nor decreases with every election cycle for almost two decades now!
More than at any period in our history, the manifesto and other public documents of those who seek power must have realistic funding plans at the heart of which must be taxation. Sadly, the current tax regime in the country makes little sense which explains why less than a thousand Nigerians are paying tax of N10 million per annum, according to Mr Babatunde Fowler, the Federal Inland Revenue Service (FIRS) Chairman. I must commend Fowler for the expertise and tenacity he has brought to the whole tax matter, even when I believe he is relying on a model that cannot work. In a revealing interview in March this year, Fowler gave an example that summarises the problem with taxation in Nigeria, although he couldn’t see it: “If your turnover is N100 million, we assume that you make N20 million profit and we charge that N20 million at 30 per cent, then you pay about N6.6 million in tax.”
How does such an assumption make sense within our environment when people supply their own electricity, erect their own boreholes for water, pay for their own security and sundry social services that government should ordinarily be providing? On top of that, we have built a social security system around the most financially secure person in a household who bears the responsibility of members of the extended family. Should we not factor all these into the plan if we want to bring everybody under the tax net? Can’t we design what suits our own environment rather than copy wholesale what obtains in America? Are we not better off with flat rates as they do in Russia or Hong Kong?
Given the foregoing, the number one issue on the agenda of the candidates should be tax. Not only because we need all the money we can get to fix our infrastructure and pay for essential services but also because we will never be able to successfully tackle corruption and crime or instill any modicum of transparency in the governing process until we bring more income earners into the tax net. Besides, with a tax to GDP of 5.9 percent as against more than 20 percent by South Africa, it means more than 90 percent of Nigerians are outside the tax net. To bring in this people, mostly in the informal sector, we have to review and simplify the tax codes and create incentives for compliance.
One day, I am going to write about my experience with taxation in Nigeria but the lesson I have drawn is that the current regime does not encourage honest citizenship that is committed to meeting civic obligations. To compound the problem, tax has now become a weapon to kill small businesses. I know many people who are on the verge of closing down their businesses because they are better off without them due to these charges and taxes that are disincentives to small scale entrepreneurship in Nigeria. It is almost as if the regulatory environment is designed to stifle business in the country.
For two days last week, Mr. Lanre Gbajabiamila, new Director General of the National Lottery Regulatory Commission (NLRC) shut down the offices and business premises of Nigeria Brewery Plc across the nation despite a restraining court order. At issue is the definition of promos as distinct from lottery but the new NLRC took the laws into his own hands. The action of Gbajabiamila forced the NECA Director General, Mr Olusegun Oshinowo, to express shock “that a public servant will rashly shut down business premises of a multi-billion dollar investment without considering the dire implications on the economy.” These are some of issues you expect in a campaign year but what we hear are empty promises.
It is instructive that when Atiku ran for the PDP presidential ticket against then incumbent President Goodluck Jonathan in 2011, he had pledged that if elected, his medium-term (a four-year period) strategy would be to finance recurrent expenditure with non-oil revenue while every kobo earned from oil revenue is devoted to investment in infrastructure, security, education and health. “We would also encourage all state governments to set an agenda and timeline within which they would no longer depend on oil revenue for recurrent expenditure” Atiku said in a statement that elicited two columns from me when I returned to the country after the election. Right now, where he stands on issue of fuel subsidy in the downstream operations and the full deregulation of the entire sector is a matter of conjecture.
When the news broke early this year that the federal government illegally diverted $1.05 billion (N378 billion at N360 to a dollar) sourced from the Nigerian Liquefied Natural Gas (NLNG) dividend funds to secretly fund subsidy payment, there was a statement from the Atiku Presidential Campaign Organisation that “the subsidy regime as it is currently being administered is inefficient and shrouded in secrecy”. But there is nothing in his current plan about what he would do differently. In fact, the PDP said early this month that Atiku has worked out a pricing template that will immediately crash the pump price of fuel in the country to less than a hundred Naira per litre because “the appropriate pump price of fuel in the Nigerian market, under the current subsidy regimes of the Buhari Presidency, should be within the borders of N87 to N90 per litre as against the N145 currently being charged.”
If that statement is true of Atiku’s intention, then it is safe to conclude he does not even understand the problems in the sector. Buhari of course does not disappoint. We know the position of his government on subsidy on which hundreds of billions of Naira have been wasted and are still being wasted with the Nigerian National Petroleum Corporation (NNPC) acting as though above the law. Last year, the three moribund refineries in Port Harcourt, Warri and Kaduna recorded a loss of N10.79 billion. Meanwhile, in September 2015, the current Minister of State, Petroleum, Mr Ibe Kachikwu, then in his capacity as Group Managing Director (GMD) had said most memorably: “Personally, I will have chosen to sell the refineries, but President Buhari has instructed that they should be fixed.”
What Kachikwu said is what most reasonable people have said for years. Why should we continue to pump billions of Naira into what has become a waste? But Buhari likes subsidy which is why his government is borrowing to finance infrastructure without thinking of how to repay while taking more loans to meet recurrent expenditures. The Kaduna train project on which a loan was taken from China, is being run on subsidy. “We spend N56million per month and we get N16 million; so we are augmenting for both rich and poor—N40 million per month under the directive of the president because he fears that the poor might not be able to afford it’’, said the Transportation Minister, Rotimi Amaechi who does not see the problem in such an arrangement.
There are other questions begging for answers: At a period the Sahara Desert is inching gradually towards the South, what is the position of both Buhari and Atiku on the issues of environment? How would Buhari tackle education beyond refurbishing some primary school classrooms and where will the money come from? How will the new minimum wage be funded by Atiku who has endorsed it?
In all, the campaign documents being celebrated by the supporters of Buhari and Atiku are loudly silent on these and other questions. I know there are many candidates in the presidential race and I intend to look at some of them and what they bring to the table in the coming weeks. But it is safe to predict that the next president will be Buhari or Atiku. That is why it is very important that we scrutinise their policy prescriptions and pay more attention to what they say. Our future may depend on it.
The book of Jonathan
On Tuesday in Abuja, the former president of Nigeria, Dr Goodluck Ebele Jonathan, launched his book, ‘My Transition Hours’. As to be expected, the event attracted the High and Mighty in Nigeria as well as former presidents of Ghana, Benin and Sierra Leone. The book itself is more interesting for what it conceals than for what it says but I guess the essence is for the former president to respond to some of the accusations from those he described as purveyors of ‘fake news’.
However, let me say straightaway that Jonathan’s book vindicated everything that I wrote on the 2015 general election, ‘Against The Run of Play’. Even the recollection of his concession telephone conversation with his successor tallies with mine since all the people I said were with him were the same names he mentioned. Besides, the reasons I gave for his defeat were the same he cited though his perspective is that these issues were manipulated against him.
In all, it is a book worth reading even when it is short on details and does not shake any table. Except perhaps for President Buhari who may not like a recall of his ‘dog and baboon’ statement which preceded the violence that followed the 2011 presidential election as well as the rehash of the speech General Ibrahim Babangida gave on why the military ousted him (Buhari) from power in 1985, I doubt if anybody would find the book offensive. The former president was even gracious to those he believed conspired against him in 2015, perhaps because many of them are now back in the PDP. But there are grand omissions.
It is, for instance, curious that there is not a single mention in the book of Alhaji Adamu Muazu, the PDP National Chairman during the election. The only reference to Prof Attahiru Jega was: “…one of my party’s agents at the INEC National Collation Centre in Abuja, Elder Godsday Orubebe eventually got into a heated argument with the INEC Chairman, Prof Attahiru Jega.” Mrs Diezani Alison-Madueke also got only one mention in the book: “…the Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, the Petroleum Minister, Mrs Diezani Allison-Madueke, the then Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi (now the Emir of Kano), all spoke on the issue of subsidy.”
There were three references to former President Olusegun Obasanjo and they had to do with his (Jonathan’s) ascension to power. Not even his main traducer, Alhaji Lai Mohammed will feel uneasy with a single mention over his statements during the Chibok girls’ abduction saga nor would Mallam Nasir el-Rufai be disturbed about the rehash of a past Tweet ‘on the metamorphosis and variants of Boko Haram’.
Meanwhile, the current All Progressives Congress (APC) National Chairman, Comrade Adams Oshiomhole, who doesn’t spare the last administration, got a positive mention as Jonathan recalls the former Edo State Governor as “the only opposition governor who stood by what we agreed. He told his colleagues that it was not fair to turn against the president when they even wanted the deregulation to have started months earlier.”
I suppose the main idea behind the book was for Jonathan to offer a defence on sundry issues: allegation of corruption which the opposition used (and are still using) to define his era; the management of Boko Haram insurgency and the Chibok girls affair which he believed (and still believes) was ‘psychologically programmed’ to bring down his government; the January 2012 fuel subsidy removal saga that became another weapon in the hands of his opponents; the conspiracy by some northern politicians against his administration essentially based on religion and the fact that he comes from the minority group as well as President Barack Obama’s ‘decision’ to effect a regime change in Nigeria.
While readers will make their own judgement on whether the book answers their questions, what I find most profound in it is the prologue and that is the message that should resonate, especially in times like this. I leave readers with excerpts: “There is nothing wrong in seeking power. I have learnt from political ascendancy in the sixteen years that I served from Deputy Governor to President that power is a shield, for those who wield it and for the people it serves. I understand that power will protect you and enable you protect your charges. It will provide a shade from the blistering heat of the sun. When it is raining you can use it as an umbrella to protect yourself and the people you are meant to serve. And when you come to a river, you can convert it to a vessel that will help you and those who you lead to cross.
“I learnt from history and personal experience that if you use power as a sword, instead of as a shield, it will begin to drain the life out of you and cause untold hardship on those you serve. Too often, many people who see power from the side-lines erroneously believe that the man who uses power as a sword is the strong man. But this is not true. Real power is the strength under control… I believe that any leader who insists on exercising most of the powers assigned to him in the constitution will end up being a nuisance to the society and a problem to himself.”
Truer words were never spoken!
And now talking about books, let me remind readers that ‘FROM FRYING PAN TO FIRE: How African migrants risk everything in their futile search for a better life in Europe’ will be publicly presented in Abuja this morning at the Shehu Musa Yar’Adua Centre. Time is 11 Am.
You can follow Segun Adeniyi on his Twitter handle, @Olusegunverdict and on www.olusegunadeniyi.com