IN principle, there is nothing to dislike about the new tax law being mooted by the administration of President Bola Tinubu. For too long, tax collection has been the bane of successive governments in Nigeria, and social scientists see the government’s failure to collect and the average citizen’s reluctance to pay as the hallmark of the poverty of citizenship in the country. To that extent, we couldn’t agree more on the need to institute a new tax regime that will bring more revenue into the coffers of the state and presumably stimulate Nigerians to demand more from authorities at various levels.
That being said, we find unsettling some of the ideas being bandied around by some government officials in this regard. The latest example concerns the Chair of the Presidential Committee on Fiscal Policies and Reforms, Mr. Taiwo Oyedele. Speaking last week at the Redeemed Christian Church of God (RCCG), City of David parish, Lagos, the tax czar, understandably eager to drive home the point that the administration will leave no stone unturned in its revenue gathering drive, disclosed that it (i.e the administration) will honour no distinction between legitimate and illegitimate economic activities. In the words of Mr. Oyedele,’One thing about the tax law is it doesn’t separate whether what you’re doing is legitimate or not; it doesn’t even ask you. It just asks you whether you have an income. Did you get itfrom rendering a service or providing a good? You pay tax.’More controversially, My. Oyedele added: ‘If somebody is doing runs girls (sic), they go and look for men to sleep with; you know that’s a service. They will pay tax on it.’
As already mentioned, we are on board with the administration in its drive to ensure that every Nigerian pays their fair share, and that every necessary legal measure be taken to that effect. Where we beg to disagree is the idea that because the government lacks ‘the capacity to distinguish between income obtained from legitimate means and illegitimate ones,’then ‘all income is deemed taxable.’ It would appear that Mr. Oyedele has forgotten that the whole idea of taxing an economic activity is because it is legal, and that what you do to an illegal activity is not to tax it, but to use the entire apparatus of the state, including coercion, to stop it. When any economic activity is beyond the legal pale, it exists in contravention of the law of the land. Accordingly, the government pursuing those involved in that specific activity is tantamount to having one’s cake and eating it at the same time.
The issue of prostitution is a case in point. So far as we know, prostitution is illegal in Nigeria, which is why the police regularly raid brothels. Those raids are not made to ensure tax compliance, but to enforce the law. Is Mr. Oyedele saying that those raids are now illegal? Surely, the government can’t seek to arrest brothel workers and tax them at the same time?
The tax czar’s comments are a reminder that a good policy in principle can be undermined by shoddy execution. Fortunately, there is still time for the government and its spokespersons to clarify the official position. The new tax law is too important to mess up.