Taxation and the question of trust

Nigeria’s dwindling education fortunes mean that many Nigerians don’t even understand taxation and aren’t equipped with the basic knowledge to understand an arcane subject that usually mesmerizes even astute professionals. Sometime last year, the federal government, with the National Assembly pushed through the tax laws. The laws led by the Nigeria Tax Act 2025(NTA) which aimed at reforming Nigeria’s tax architecture, broadening the tax base, achieving tax inclusivity, and laying the groundwork for extensive economic development through robust taxation, were immediately met with resistance and recriminations.

As Nigerians struggled to comprehend the proposed laws, there were accusations and counter-accusations about what the laws were meant to achieve. In the end, however, after wider consultations, the laws were passed, effectively changing Nigeria’s tax landscape.  The laws that came into effect on January 1, promise to transform the fortunes of Nigeria’s taxation with the understated effects of transforming the lives of Nigerians. But the whispers and outright whiplash that continue to greet the laws tell a familiar and potentially portentous parable.

Simply put, Nigerians are no tax enthusiasts. As with the ingrained condition that shapes their approach towards many other issues, Nigerians need convincing and even compulsion when it comes to paying their taxes. To be clear, this is not a compliance problem as much as it is a conviction conundrum. Nigerians simply do not trust that the taxes they pay will be deployed for their benefits. More tellingly, Nigerians do not trust the government.

Decades of systemic corruption have laid waste to any trust Nigerians have in those who collect and account for their taxes. It is a commonly held view among many Nigerians that whatever money they remit to the government by way of taxes has a way of ending up in private pockets. Whether this view is right or wrong is not significant as much as its effect on how people perceive the government.

In a country where infrastructure has suffered years of neglect, with security and the economy taking equally jarring hits, it is difficult to make sense of Nigeria’s crippling underdevelopment and grinding poverty in light of the vast amount of resources that have accrued to successive governments.

•Ike Willie-Nwobu,Ikewilly9@gmail.com