Tax is the return due to society on its investments – the roads, educated workforces, courts and so on – from which companies benefit. If they avoid or evade tax, they are free-riding off benefits provided by others.
It is essential to move away from viewing tax compliance merely from a legal perspective – whether the corporation has broken the law or not – but from an economic perspective: whether it is free-riding off others. If they are not paying their way, they are being irresponsible – and there is a problem that needs fixing.
The development of any nation depends on the amount of revenue generated by the government for the provision of infrastructural facilities. Taxation is the key to unlocking the resources required for public investment and infrastructure growth.
Although taxes are considered as a legal requirement, paying taxes is also considered a civic duty. If you neglect to pay, the mediating body that oversees taxes (the Federal Inland Revenue Service) will require that you do so, otherwise, you might face penalties such as colossal fines or imprisonment.
In recent times, the Federal Government’s surge for taxation has seen it utilize the Economic and Financial Crimes Commission (EFCC) and the Federal Inland Revenue Service (FIRS)to hunt down tax defaulters as well as innocent citizens through their bank statements.
Attesting to this, Barr. (Mrs.) Margaret Orakwusi, Chairperson, Nigerian Ship-Owners Forum highlighted her experience during the 2nd MMS Transport Leadership lecture and awards.
“I have had my bank accounts blocked and I’m sure it must have happened to several people. They released my account because I went to the bank. The government can’t clamp down on my account and put a figure as tax. I have no business with the tax people because I pay my tax. If they feel it is not sufficient, they have to go about it the right way. Don’t allow the banks because they have now become tax collectors. Are we in a lawless society? Why should we allow all these to happen?” she said.
Highlighting a similar experience, Princess Vicky Haastrup, Executive Vice Chairman, ENL Consortium disclosed that those who pay their taxes duly continually have their accounts blocked despites paying tax.
“The federal government is busy taxing us and some weeks ago, it put a claim on my account because they are looking for money. The federal government didn’t have a reason to put a claim on the account. I audited the account and I pay my tax. They had to remove that claim because I fought”, she said.
While it is expected that government utilizes these funds to discharge its numerous responsibilities for the development of the social amenities, transport infrastructure, among others; a look at the streets and state of infrastructure tells a different story.
The Group Managing Director, SIFAX Group, Mr. Adekunle Oyinloye said; “We are paying taxes to Federal government, State government and Local governments and the figures runs into hundreds of millions. We are happily paying it as a responsible organization. We want government to see that as our contribution to the society. However, we would be happier to see the impact of that tax payment on the streets, in the schools, hospitals and in the development of other social infrastructure”.
Despite, the importance of tax to the economy, government seems to be going about the collection through a wrong process. Several areas such as infrastructure, education, health, and others are still suffering. What are they doing with these taxes? Companies and business owners are paying these taxes but where do these taxes go?
While the Federal Inland Revenue Service (FIRS) should be encouraged to follow the due process, government should also ensure that the taxes paid by companies reflect in the infrastructure, health, education and other sectors of the economy.