An unending debt Christians have is to owe no one anything except to love one another, for he who loves another has fulfilled the law. Our elementary principles of financial freedom and fiscal responsibility teach us to refrain from being debtors, and to live within our means. In other words, we are told to sew our cloth according to our clothe. Just as we owe a debt of love to every human being, we equally owe a debt of tax to instituted authorities. Payment of tax is not only our civic responsibility; it is also one of the duties of a good citizen.
The essence of taxation is to raise revenue for meeting part of government expenditure, to provide economic and social benefits to the public, and for the purpose of controlling economy. A good tax system has a number of characteristics. In the book, “The Wealth of Nations” written by Adam Smith in 1776, he set out four canons or principles of taxation. These are equality, economy, certainty, and convenience. These rules are closely followed by most present-day governments. A good tax system should not be rigid. It should be easy to change so that it can be adapted to changing circumstances in the economy.
A number of factors tend to make the collection of taxes difficult in Anambra State especially touting and the activities of the middle men. There is a high incidence of tax evasion and tax avoidance. The Governor himself as a top-notch economist is undeterred, properly following the principles of public finance. Governor Chukwuma Soludo has exempted all the low-income earners and subsistence farmers from personal income tax. He has equally streamlined the digital process of tax collection so that the Government would not be lampooned. Many people make false declaration of income. Also, people try to avoid tax by looking for loopholes in the tax law. Mostly, people pay tax only when they want to run for a public office, get government contract, or have a stake in the political organogram of the state. Recently, so many private schools were blacklisted for non-compliance with the registration procedures. Some financial institutions were also found wanting in
their tax obligation. The hospitality industry is not left out as some are in the net of government penalties. There is a high cost of collecting taxes in Anambra State. Some people may feel discontented and that they are not adequately rewarded by those in power. This is especially true if their areas are not receiving adequate share of social amenities. They, therefore, resort to agitation and violence if they are called upon to pay tax.
The obligation to pay taxes has existed since the beginning of time and is crucial to any government as air is to people. The payment of tax in Nigeria is backed up by Section 24 (f) of the 1999 Constitution. Naturally, a country’s lack of resources prohibits the government from fulfilling its duties for the welfare of the populace. Basic necessities like creating public schools, providing water, constructing adequate roads, maintaining facilities, paying the wages of civil official etc. become increasingly challenging to accomplish. Again, the amount of revenue the government would have earned through taxation is drastically reduced as a result of tax avoidance and evasion. There would be stagnancy in economic growth and development.
An effective way to improve tax compliance could be to improve the provision of benefits and make people aware of how the government spends tax revenues. The willingness among citizens to pay taxes depends on the benefits that tax payers expect to receive in return for paying their taxes. Finally, let us all take solace in Governor Soludo’s assurance that our tax money will work for us.
Written by OBIOTIKA WILFRED TOOCHUKWU
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