Delta: Heralding A More People-Friendly Tax Administration

By Fred Edoreh

Here is the equation: All people desire increased development while governments require money to fund projects and programmes to attain meaningful levels of development according to needs assessments.

In Delta State, Governor Sheriff Oborevwori has promised even more, in line with the cardinal points of his campaign. Question is, does the state have the volume of revenue to meet all the needs of the various communities and sectors?

For most advanced countries, national revenue is derived mostly from taxes, the chunk of which are administered by the states and counties. For instance, individual income tax accounts for about 50% of revenue in the USA and various European states and districts, followed by social security tax on wages, corporate and property taxes, while the national governments are further supported by multi-sector national and international investments which they had made over the years through multi-national corporations.

For many Nigerian states, the major sources of revenue are federal allocations from proceeds of sales of crude oil and Internally Generated Revenue mostly from direct and indirect taxes.

However, for several years now, federal allocations to states and local governments have been dwindling due to low crude oil production output as well as fluctuations and decline in international crude oil price. The situation is made more difficult by low tax to GDP ratio across the states.

The pressure to fund development has therefore led both the federal and state governments to resort to borrowings which in turn have become a cause of concern for the citizenry, minding interest on loans which, in the case of the federal government, rose to over 90% of annual revenue.

It follows that for Nigerian states to steer away from frequent borrowings, with its attendant liabilities, and still meet the demands of development, they have to improve on IGR by getting the people more involved in the funding of development for a win-win situation, as is the case in the advanced nations.

To pull away from debts while still pursuing meaningful development, the Delta State Government, it seems, is aiming to improve on IGR, albeit with a caveat on taxation.

At the inauguration of the Delta State Board of Internal Revenue, Governor Oborevwori signaled that even though the state requires improved revenue from taxation, he would want a more people-friendly tax regime, such as would not put new tax burdens on the people.

“Often, when new taxes are introduced, it is imposed on the same people and businesses already captured in the tax net which often leads to over taxation and the attendant frustration, anger, and resentment,” he cautioned.

“What is required is to expand the tax net in such a manner that the informal sector would be adequately covered.

“It is therefore, incumbent on the board to devise creative ways to drag as many people as possible from the informal sector into the tax net,” he advised.

Lending his voice, the Deputy Governor, Sir Monday Onyeme, hinted also at the desire of the administration to protect the dignity of the people in the process, noting that the resort to crude and inappropriate methods to achieve revenue targets is a disincentive to tax compliance.

This disposition of the number one and number two men of the state indicates that they place priority on the well being, security and preservation of the dignity of the people even as they truly will require increased IGR to fund greater infrastructural and social development across the state.

“Our people are generally understanding and cooperative. I believe once they are made to see reason, they would gladly and willingly comply with their obligations to the government.

“To do this successfully, it is exigent for the board to embark on elaborate and sustained enlightenment and awareness campaigns,” he recommended.

The state has good hands for the task considering that the Deputy Governor, Sir Monday Onyeme, was former Executive Chairman of the DBIR with a deep graspe of tax administration, while the new chairman of the board, Chief Solomon Ighrakpata, also comes with a huge experience as former Executive Director of the DBIR in charge of the Enforcement Tax Force.

The point is for the people to understand the importance of tax compliance as not just a civic duty but a requirement of the law, by constitutional provision and, indeed, a religious obligation.

Jesus Christ exemplified this in the Bible when he asked Peter to cast a net, open the mouth of the fish and use the money he will find inside to pay his tax and that of Peter, advising further that it is God that establishes governments and that it is mandatory for citizens to obey the laws of the land as he himself has done.

Moreso, as a social contract, Governor Oborevwori has assured Deltans that their tax payments will be put into projects for their direct benefits and with a great sense of transparency and accountability.

“I wish to reassure the people of Delta that this administration will account for every kobo that accrues to it by ensuring that they are well spent on meaningful development projects that will positively impact on the living conditions of our people,” he assured.

As it is said, development is a collective, such that as the government sides with the people, it is also incumbent on the people to act their part as a matter of responsibility for the common good.