The CBN's #50 Stamp Duty Charge

THE CBN’S #50 STAMP DUTY CHARGE

    The last time I painstakingly checked, the Nigeria’s regulatory bank, the Central Bank of Nigeria (CBN) had introduced a fifty naira (#50) stamp duty charge on deposits and transfers of one thousand naira (#1000) and above. This implies that henceforth the sum of #50 would be deducted from any functional bank account in Nigeria, regardless of its (the account’s) type, whenever such account enjoys a deposit of or receives a minimum of #1000 either via the counter or online/ATM transfer.

    It’s not anymore news that in various quarters across the federation, a lot of criticisms, mixed feelings as well as counter reactions had greeted the aforementioned abrupt and harsh measure which is targeted to serve as a form of tax. Such mode of tax suddenly imposed on the citizenry, which is currently yearning for a compelling review by the apt authorities, is to say the least a thing of worry to anyone who truly thinks well of Nigeria and Nigerians at large.

    We reportedly learnt that the funds to be raised from the bizarre charge or exercise would be sent to the federal government to help boost revenue for the country. No doubt, we are not unaware that Nigeria is presently faced with severe economic meltdown accompanied with several political crises, hence seriously in need of assistance from not just her teeming citizens but any individual or corporate organization that wishes her well, but we ought to acknowledge that there are so many ways to kill a monkey without hurting the poor and innocent crops.

    Even if Nigeria’s hope as regards her revenue generation is currently mainly dependent on taxation, she can boast of a robust economy without taxing the poor masses inconsequentially provided an adequate and reliable tax payment policy is maintained in the system. Unequivocally, tax evasion or avoidance remains the greatest plight plaguing tax administration in Nigeria in its totality thereby posing an unprecedented threat to the country’s economic status.

    To start with; tax is a civic contribution imposed by the government of any country on its subjects, both individuals and corporate organizations, with a view to raising adequate funds required to finance its statutory responsibilities of ensuring optimum public welfare in all ramifications to include socially, economically and politically.

     Nevertheless, for decades now, effective administration of tax system in several countries across the globe has been bedevilled by various challenges including tax evasion. The aforementioned societal canker among many others is presently argued to be the most challenging practice in developing countries like Nigeria.

    The ugly phenomenon of tax evasion, which is described as a deliberate illicit attitude involving a direct violation of tax laws cum Acts to avoid payment of taxes, is conspicuously harboured in every society or locality across the federation that it requires a non-human face toward its complete eradication. If such leakage alone is holistically addressed, there won’t be any need for the recently introduced #50 stamp duty charge by the CBN.

    In spite of the enormous control measures put in place by the apt authorities, some individuals or corporate bodies manoeuvre their ways and break government’s policies in such a manner that one may wonder if the citizens are greater or more powerful than the government. Funnily enough, such set of persons is usually the prime beneficiaries of governance in a country like ours where good governance is rarely enjoyed by a common man.

    The lingering tradition of manoeuvring tax laws is considered illegal, thus requires to be duly tackled headlong by such concerned authorities as the Federal Inland Revenue Service (FIRS) and the various Finance ministries, among others, in collaboration with the Economic and Financial Crimes Commission (EFCC) and other related agencies. Unarguably, the quest for a renewed political will toward checking tax evasion in Nigeria has become paramount and inevitable owing to the pace of the ongoing economic meltdown in the country.

    To say the least, a good and viable tax system attracts numerous national and individual benefits among which are enhancement of government’s revenue, adequate regulation of macroeconomic variables, redistribution of income inequality among the citizenry, just to mention but a few. Obviously, a reliable tax system has been proven to be a tool for the proper regulation as well as stabilization of erected human attitudes or reactions in an economy.

    Since taxation has been noted to be a significant instrument in government’s fiscal policies in any developed society, there’s a compelling need for the Nigeria’s governments at all levels to treat it as such. Even the likes of Lagos State whose major revenue is being derived from taxation could testify to the fact that regular payment of taxes plays a very vital and unavoidable role towards the sustenance of a robust economy in any existing society in the world.

    Without mincing words, the Nigerian tax system indicates that the authorities responsible for managing as well as overseeing taxation have not been transparent or appropriately accountable to the government or the electorate in general. This anomaly has been a global occurrence as evidence indicates that tax personnel who are expected to promote transparency in tax payment as well as detect fraudulent acts regarding the exercise end up using their expertise to facilitate tax evasion.

    It’s more worrisome and disheartening to acknowledge that those who invariably dodge payment of taxes in Nigeria are mostly millionaires. A painstaking survey shows that these persons are not even found in taxpayers’ census; needless to insinuate that this set of unscrupulous and unpatriotic individuals or investors, either indigenous or foreign, often connives with the so-called tax personnel or professionals towards actualizing their selfish and dastardly desires.

    On the other hand, touting as witnessed in several quarters including motor parks, airports, seaports, the FRSC, market arenas, various borders, and what have you, has seriously hampered adequate regular tax payment in the affected sectors at the expense of our dearest economy. Touting that has in recent times been observed as an activity that is ostensibly acceptable by the Nigerian state has succeeded in ravaging every facet of the country’s tax administration.

    Hence, the Mohammadu Buhari led administration that’s deeply concerned about the dangers inherent in corrupt practices ought to look inwards towards blocking all forms of lingering leakages occurring in all levels of the country’s tax administration with a view to salvaging the poor masses from any unfair treatment in the name of ‘taxation’ among others such as the newly introduced #50 stamp duty charge, the abrupt 45% increment of electricity tariff, and many other trivial charges currently taking place in the banking sector which are really telling on the said group of people.

    First, we need to from time to time have a thorough census of all citizens of the country including the working class and the idle ones. Similarly, there’s need for the Federal Ministry of Finance to have a data that would boast of a comprehensive list of all the legitimate consortia operating in the country; in the same spirit, any organization operating in the country but yet to be duly registered with such relevant agencies as the Corporate Affairs Commission (CAC) and the Council for the Regulation of Engineering in Nigeria (COREN), et al, as the case may be, should be outrightly shut down indefinitely till the owner abides by the rules. This measure alone would go a long way towards maintaining a functional and reliable tax payment system in the country.

    Inter alia, forensic tax payment system ought to be introduced and regularly utilized by the concerned authorities. We need to advance in technology as regards the country’s tax administration. And most importantly, we must as a matter of urgency review most of our fiscal policies related to taxation with a view to making amends where necessary.

    Besides, apart from the leakages witnessed in the tax arena as mentioned above, there are numerous leakages presently taking place in such various other sectors as, but not limited to, the civil service and the petroleum industry, that if holistically addressed, would tremendously help to finance the country’s proposed capital projects as captured in the 2016 budget. Indeed, there are several ways to kill a monkey without hurting the poor and innocent crops in the farm.

    However, as much as we are not unaware that making out time to pay our taxes is a worthwhile and commendable civic responsibility, the government on its part ought to equally endeavour to utilize the tax payers’ money judiciously come rain come shine. Think about it!

Comr Fred Doc Nwaozor

(TheMediaAmbassador)

-Researcher, Blogger, Public Affairs analyst & Civil Rights activist-

Chief Executive Director, Centre for Counselling, Research

& Career Development - Owerri

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frednwaozor@gmail.com

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