FG don’t mess with tax law

By Dele Sobowale

The report in the PUNCH went on to state that “The Chartered Institute of Taxation of Nigeria, has warned of the risks the nation becomes exposed to over alleged discrepancies between the tax laws passed by the National Assembly and the versions that were gazetted.”

President Tinubu is strongly advised to listen to the words of wisdom offered by the CITN instead of his own appointed officials; who are invariably sycophants and would lack the courage to tell him the truth on matters like this. Mr Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax reforms exemplifies the attitude of presidential ‘yes-men’ who believe that anything done by their boss is acceptable. People like him sow the seeds of full-blown dictatorships – which provide no alternative than military rule later. Bluntly refusing to acknowledge that the only Tax law which can be legitimately implemented is the one passed by the National Assembly, NASS, he insists on starting the New Year with the gazetted version – which is a counterfeit; and will cause uncountable problems for the country.

By sharp contrast, the 17th President/Chairman in Council of the CITN, Mr Innocent Ohagwa, after stressing that “the integrity of the legislative process is fundamental to the rule of law”, went on to add that “tax legislation in particular, requires the highest level of accuracy, transparency and procedural fidelity due to its far-reaching implications for government revenue, businesses, professionals and citizens”. That is a patriot speaking. Nigerians, not wedded to the tricks of politicians, need to be reminded that tax is not one of those issues on the national agenda which can be mishandled by a ruling party. A few reasons should explain why tax is not a partisan matter. It is vital irrespective of the party in power and for how long.

The CITN was established on February 1, 1982, by the President Shehu Shagari-led National Party of Nigeria, NPN, to provide professional, objective and independent advice to governments and the people on the explosive and unpopular subject of taxation. As much as possible, the institute avoids getting entangled in politics; as it is now. It is quite unfortunate that several members of the CITN, now temporarily in government, would support a process lacking in transparency and procedural fidelity.

ORIGIN OF TAXATION

“In this world, nothing can be said to be certain , except death and taxes.”

Benjamin Franklin, 1706-1790.

 Right from the beginning of civilization and the establishment of states, levies and taxes have always been imposed by rulers primarily to pay for wars and to keep the rulers as comfortable as possible. Democracy and the right to choose leaders altered the process of taxation by vesting the power to tax in the legislature instead of the monarch, emperor or warrior-leader. That process was expected to confer more powers on the people than the ruler. As Oliver Wendell Holmes, Jr, 1841-1935, summarized it in Compania de Tabacas v. Collector, 1904, “Taxes are what we pay for civilized society.”

That notwithstanding, because taxes are imposed by political actors, even the appearance of transparency, due process and accountability has not always guaranteed its fairness. That was what prompted Alexis Tocqueville, 1805-1859 to observe in Democracy in America, 1835, cynically but, factually, that “A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.” The current Nigerian Tax Law, authentic or fake, is a classic example of executive and legislative tax-dodging.

Most of the incomes claimed by Presidents, Ministers and lawmakers, running into hundreds of millions for each individual, are not captured in the tax net. Meanwhile, private sector individuals enjoying the same benefits are compelled to pay.

 Even the fairest of all taxes imposed by governments have a negative aspect to them. US President Calvin Coolidge, 1872-1933, in a speech in Washington on June 30, 1924, declared that “The power to tax is the power to destroy…A government which lays taxes on the people, not required by urgent public necessity and sound public policy, is not a protector of liberty, but, an instrument of tyranny.”

OUR PRESENT PREDICAMENT

 Justice Holmes found himself writing a dissenting opinion in 1928 in a case, Panhandle Oil Company v. Mississippi ex rel. Knox, Attorney General in which he wrote that “The power to tax is not the power to destroy while this court sits.” That should warn Nigerians that, given a complaisant, instead of an independent Supreme Court, we might inadvertently be helping to create our “instrument of tyranny” by allowing the passage of Tax Laws which are devoid of checks and balances between the Executive and the legislative branches as the alleged gazetted version has done.

Elsewhere, the point has been made that it might not be in Tinubu’s personal interest to be associated with a Tax Law which removes oversight powers from the National Assembly. Permit me to repeat myself; it is vital that we avert the disaster which the political opportunists plan for us by making alterations to the original Tax Law.

“History does not repeat itself; man does.” Harvard Professor Barbara Tuchmann.

 Whether or not President Tinubu was aware of the alterations remains to be determined. It will be most unfair to assume he was. Irrespective of whether or not the President was aware, the issue has thrown open the equivalent of the Watergate incident in the United States, which forced an overwhelmingly elected President Nixon to resign or be impeached. What has happened is a serious breach of the constitution – in which no President should be involved. It is not even in Tinubu’s interest to engage in such conduct and to seek such powers as indicated by the nature of the alterations made to favour the executive branch. Nigeria’s political history provides a ready example of the dangers to Tinubu himself in the future – when he might no longer be President.

Among the first decrees passed when General Obasanjo succeeded late General Murtala Mohammed was the one to deal with those accused of the failed Dimka coup. Former Head of State General Yakubu Gowon was one of the accused. The Decree was the first to place the burden of proof of innocence on the accused instead of the prosecutor. Gowon would not be alive today if he was caught. All the accused persons were found guilty and executed. It was the same decree, slightly amended by Abacha, which was used to prosecute and jail Obasanjo later. The point is obvious. Unless Tinubu has a rock solid plan to rule for the rest of his life, he should distance himself from the amended Tax Bill.

Otherwise, he might find himself in the dock under another government for alleged tax offences. “Time is longer than rope.” (Mandela).

My best advice to President Tunubu is to delay implementation of the Tax Law, if it has indeed been altered after the NASS had passed the contentious Tax Law. He should also distance himself from the promoters of the amendment. Multinationals will recoil from a nation operating a dubious tax law.

Follow me on Facebook @ J Israel Biola

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