Umunnem Ndi Anambra: We MUST pay Our Taxes and the Government MUST do the needful - Ik Muo, PhD.


                 Anti-Tax Protest,  February 2020;                   Anti-Tax Protest, Onitsha,  9/12/22

In the last one year, I have  made three major interventions on Anambra matters. The first was the Letter to Professor Soludo(December, 2021) in which I  congratulated the Governor on his  deserved electoral victory and  as in the character of  many columnists, offered some unsolicited advice. The second one was Soludo on the Driver’s Seat: A Third Order change, A Big-Bang, Cometh!( March, 2022); in which I previewed  Soludo’s tenure  and prophesied that  Anambra would witness a multidimensional  ‘big bang’ . The third    was Ghost-Town Strategy, UGM and Reign of Terror: By whom and for what? (April 2022), in which I x-rayed the  UGM phenomenon,   the ruthlessly enforced Monday  SAT( sit-at-home), the consequential bloodletting and mindless destruction in ana-Igbo . I made all these interventions as a Soludoist,  onye-Anambra in the local diaspora and as a ‘stake-holder’( a term that has been of late misinterpreted, abused and misused) in the Anambra Project, even though I do not know how much stake I held or hold.  Today, I am not writing as  Soludoist; I am writing as an ‘ancient  economist’ who studied economics in the good old days( 1977-1980) in one of the best Departments of Economics in the world then( University of Ibadan) peopled by top-notch academics from all over Nigeria and all over the world. By then, there were neither  android phones to calculate IRR and NPV nor   laptops to design models within minutes. I am also writing as one who is away from home but is regularly at home, and who wishes that Anambra should be an ‘A-State’.

 Anybody who occupies a public office, especially as a governor or president in Nigeria, must surely receive doses of darts from critics; some informed, some misinformed, some in good faith, some hatchet-jobbers and attention-seekers, some   who felt they  should   have been  invited to the table, or that they are poorly appreciated, some political opponents,    and those watering the ground for the next elections.  Some are also due to some avoidable  gaffes and slips of tongue by the dramatis personae.  At times, these darts are a mixture of misinformation, disinformation and malicious concoctions. Of course, critics are a normal part of democracy. The person in charge  appreciates public opinion and is kept on his toes. However, this is of limited application in Nigeria where our ‘dealers’  behave  ‘Napoleonistcally’, treat the public with disdain and hope to retain power  by  undermining the  easily manipulable electoral system.    Of course, there is a wide gulf of difference between criticising and critiquing. Professor Soludo has received  all these types of darts  over diverse issues and  from diverse publics, within and without Anambra State. However, my interest today is on the strident public outcry about Soludo’s tax regime.

 Sometimes ago, there was a joke making the rounds in the ubiquitous social media advising ALL bachelors  in Anambra State to quickly get married before Soludo introduced  a wedding tax! Before then, the  trending news was that Soludo had imposed a funeral tax of N100,000 in Anambra State( which was not true). Three weeks ago, a group of drivers protested the ruinous taxes imposed on them by the Soludo who is now seen as a tax-master, not a task-master. Keke drivers, petty traders, foodstuff dealers, shuttle and bus drivers, have all protested  over the same matter, making Anambra, the HQ of protests in the last few months. In preparation for this intervention, I tried to get full details of what transpired  in the drivers’ protest and incidentally, stumbled on  two related headlines. The first, ‘Truck drivers block highway to protest over-taxation in Anambra’  was in February, 2020. Obiano was in CHARGE then. The second; Soludo’s tax regime: Travellers stranded as transporters protest in Anambra was in  September, 2022( Soludo had taken over by then).  The protest against over-taxation in Anambra State  did not  start today; it is probably one of the things  handed over  by the Obiano Government. Even across the globe, it is a very old phenomenon as  the  star war cry of the American Revolution was no taxation without representation.

On Friday, 9/10/22 however, Anambra State experienced the father and mother, uncle and aunt of all anti-tax protests, the one that drew the attention of the whole world  to the tax-crises in Anambra State. Trailers trucks and tankers coming into Anambra  blocked the Niger-bridge and eventually all the major entrances into Anambra State( Asaba-Onitsha Enugu-Onitsha, Owerri-Onitsha) in protest over the  contentious N30,000 levy imposed by ANSG. Probably, they learnt from Canadian anti-vaccine truckers!  Beyond the size of the levy, the drivers were complaining  tax multiplicity, uncertainty  and as one of them stated, violence in everything about collection of money is being witnessed daily in Anambra State, particularly in Onitsha’ The bridge head has always been the  epicentre of traffic madness  in the East and  we should thus imagine what it  looked like when it was deliberately blocked. An unknown complainant was there for 5 hours( 5-10 am) and had not moved an inch. You can imagine what this caused Nigerians, Nigeria and Anambra State.

Before  all this, I had spoken  to some people in the market square and extracted the following: That  in an effort to expand the tax-net, there was a sudden hike in the existing taxes payable by various individuals and businesses, and introduction of new taxes which involved those who were not paying taxes before. That the government outsourced the tax collection to some firms, who then deployed touts (which the government had promised to eliminate), who are more vicious than the previous touts, on the helpless and hapless citizens and  businesses. That containers which were charged about N5000 apiece now pay N30,000 plus other incidentals as a result of which most of them adopted the Cotonou model (discharging at Asaba and gradually taking the goods to Anambra or  even forcing the customers to come and buy from Asaba).  Okada, keke, taxi, shuttle  and township busses are now charged N300. N600, N700, N1200 daily for 25 days.    Datsun, and 6 tyre trucks are charged N6000 and N20000 to offload and they are also charged for loading. A motorist complained how ANSG real or fake functionaries imposed a fine of N50000 on him on  the Niger Bridge, dragged his key with him and he decided to physically withstand them.

 And then, about 1 month, my younger sister went to make some purchases at Onitsha. After  settling the haulage charges with the shuttle and truck drivers, she was then ‘ordered’ to pay N3000 and N8000  respectively before the vehicles could leave the park. I don’t think that this had any relationship with the destination.  So, in addition to paying the two drivers, she paid an extra N11000 and this is just from one individual and in one transaction! I don’t know if this extra payment was part of the taxes on the drivers and if it was paid directly to the state-government as we were  assured earlier. What is obvious is that the drivers have directly ‘outsourced’  some of the levies to the customers, rather than paying from their own resources. So, the tax- protests have been caused by  hike in taxes, in a dwindling economy, highhandedness of the tax collectors( a return of  crude  and crooked tax-raiders of yore, a regular feature of Upper-Iweka) and the reintroduction of touting, which the government had promised to eliminate, into the process.

Some of these concerns   are genuine and require urgent and coordinated government attention. However, my contention  on the one hand is that we MUST be ready to pay our taxes; we MUST accept taxation as a normal part of the economic system,  and that all economic players should pay taxes to sustain the government.  On the other hand, taxates  should be decently collected and should not harm the businesses or the state.  Nigerians suffer from acute tax-phobia; they are experts in tax evasion( as against tax avoidance). Only civil servants pay the taxes because it is deducted at source. Very few businessmen (including those who can buy my entire household) have paid the kind of tax, which the son of man has paid this year.

Taxation is not new; the  stockpile of grains, which Joseph managed in Egypt was the outcome of produce-taxation( the equivalent of our own excess crude account, which Governor Amechi et al  rejected?) imposed by Pharoah. And in this case, the people directly benefitted from the tax, as the grain-reserve was used to sustain them in hard times. In Igbo-Ukwu, Chief Umeanadu, our last warrant chief, also imposed all sorts of levies and taxes on the people, including the labour with which his palace was built.  Beyond the formal taxes, which he collected for the ubiquitous white man, he could seize anything he liked from the citizens: palmwine, farm produce and even  daughters. Of course our people rebelled and that was the end of the warrant chief institution in Igbo-Ukwu

However,  taxation creates  a fundamental dilemma and  contains an inbuilt and permanent source of conflict between the taxer and the taxed.  While tax provides a fundamental source of funding for the government , it reduces the disposable income of individuals and profits of businesses.  Thus, while the government wants to tax as much as possible, the citizens want to pay as little as possible, especially in this clime where you need a high-calibre microscope to see what has been done with the money. It is thus imperative  to create a delicate, optimal  balance,  between these two conflicting interests because the extreme  in either direction( taxing too much or  not taxing at all) will not help anybody. This is the reason why economists, right from the days of good-old Adam Smith, have harped on the principles of  a good taxation policy and process. In his Wealth of Nations (1776) Adam Smith identified the four principles of taxation as fairness( compatibility with tax-payers circumstances, including the ability to pay),  certainty  ( known information about the why when and how of taxes)convenience( simplicity and ease of compliance) and efficiency( positive impact on the  payers and the economy and  cost-benefit analysis). Other principles include empathy, enforceability. proportionality and neutrality. I am now, by the powers  conferred on me  by Professors Edozien, Mbanefo and Iwayemi, adding  civility  and clarity!

It appears that most of these ATPs (Anambra-Tax-Protests)  revolve around the issues of  fairness/ability to pay, certainty/clarity, empathy and civility.  Some people are also not happy that   despite the governments promises, touting and indiscriminate revenue collection   are back in FULL force. In an era in which the NNPC  remittance had shrunk  from $3bn monthly  in 2015 to zero, when FAAC allocations have  nose-dived abysmally, and when there is a new governor in town who wants to make a serious  dent on our infrastructure deficit, we should be willing  to pay our taxes.   Furthermore, criticisms of the tax regime should also be a little bit scientific. We  should consider the current  tax regime with the previous one,  and with tax-regimes in other states in same socio-economic status .  Again, people  are taxed based on their incomes or usage of  public facilities . Most of the protestants have been arguing that the taxes are  too much  and the question is ‘too much relative to what’? To what they want to pay or to what they ought to pay ? It is obvious that if the government taxes businesses out of existence, it will have no more businesses to tax.  The process of tax collection should also be civil and decent. And the people should eye-mark what the government does with the taxes. I doubt if anybody from Ikenga, where the first tarred road since history, is being constructed, would ask what the government does with its taxes!

On the other hand, the government must continuously engage the various tax payers, listen to their complaints, and act with compassion when and where necessary. The intervention of the State Government  following the recent face-off at Onitsha and the 4-point agenda( dealing with rogue tax collectors, inclusive efforts to sanitise taxation process, reliance on only government appointed agents and appealing for public support and release of help-lines)  highlighted by the government is welcome. It also shows that the government understood or appreciate the concerns of the tax-payers. I hope that this douses the tension sustainably. And just the other day, the Operation Clean and Healthy Anambra, (OCHA) Brigade, in conjunction with  other security forces arrested 7 illegal revenue collectors, operating within and around Awka. This is a sign that the government is walking the talk and this will help in confidence building.


Illegal Tax Collectors

Part of the recurrent issues with change and change management is resistance. These ATPs are part of change resistance and the government should deploy the  strategic change resistance  management model in addressing this   tax-is-too-much matter.  There should also be an effective  strategic change management communication. This  ‘governor is always right’; or ‘ all correct sir’  model will NOT do!

The taxed should also optimise   the key advantages of being a tax-payers. On 22/5/18, Professor ROC Somoye (presently the Deam of Faculty  Administration and Management Sciences) delivered the 82nd  Inaugural Lecture at Olabisi Onabanjo University, titled  Multicratic finance, fiscal governance and sustainable development: Where does the money go?  What concerns me is not the big grammar, especially ‘multicratic’ in the first part of the topic;  my concern is on the question where does the money go?. When we pay our  taxes to the government, we should be in a position to  boldly demand accountability by asking: where has the money gone? We should also ask whether it went where it should go (our priorities) and whether  a road that costs N20m per KM in Imo state is priced at N75m per km in Anambra State. That is the most important outcome of these tax protests and awareness.

 As for the government, I want to give an unsolicited consultancy. Most of our people are living in the local and global diaspora. We can persuade our people outside Anambra to  voluntarily key into Anambra Diaspora Support Fund of, for instance, N5000 monthly. If 2.5m ndi-Anambra subscribe to this fund, it will gross about N150bn PA, which may be enough to  remodel and standardise  our secondary schools  within a year.  Asking for regular small contributions is better that asking occasionally for fanfare-based big donations, where  bad-debts exceed the good ones!. Of course, this presupposes that the government has the database, practices transparent governance, makes  genuine strides that are visible (as against propagandising)  and enjoys the goodwill of the people.

To sum, the people MUST agree to pay their taxes; that taxation is inevitable in a modern society. The government on the other hand  MUST ensure that the principles of taxation, especially equity, convenience  clarity and civility are applied. I have spoken!!!


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 Ik Muo, PhD. FCIB. Department of Business Administration, OOU, Ago-Iwoye. 08033026624

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Comments

  1. Cost of living in Anambra is becoming outrageous due to overtaxing...

    The tax is not even taxed according to what you earn rather. It's a general tax...

    ReplyDelete

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