Meaning
Taxation is derived (from the Latin word taxo; meaning ‘rate’) is a financial charge or other levy imposed upon an individual or legal entity by a state. Thus, Nwoke (1993:1) taxation can simply be said to be the imposition of an obligatory levy or contribution of an individual or corporate body to a public authority. TWO IMPORTANT ATTRIBUTE OF TAXATION are that the levying authority posses legal right to do so and adherence is compulsory.
INTRODUCTION
The bedrock of industrialization and economic development of any country is government revenue. Government generate revenue from different sources such as sale of natural resources (crude oil, lime stone, gold, etc), proceed from exports, and above all tax. Nwoke (1993:12) authoritatively affirmed that taxation constitute about 75% of government revenue and ¾ of government expenditure is funded from tax revenue. Although this does not apply to Nigeria as the country is widely reputed for it’s over dependent on oil revenue (mono cultural economy). Hence, Aderonmu (2010) lamented that oil revenue constitute about 85% of Nigeria’s total revenue and 95% of its foreign exchange.
The practice of taxation has been traced to the pre-colonial Nigeria, particularly in the centralized north, with an all powerful Emir and a predominantly Islamic region that believes in the practice of the taxation. With this in place, the British government had no choice but to consolidate on the direct tax system in the north and spread to the rest part, since they needed money to run the government, provide social infrastructures, boost the economy and provide jobs. Historically therefore, taxation has a link and a tie to development, infrastructural facilities, job opportunities, and robust economy.
Therefore, the central thrust of this piece or lecture is to succinctly analyse (comparatively) the connections between taxation and development with Kogi state as our case study.
TAXATION AND DEVELOPMENT
As a way of raising fund, generating revenue for the government, taxation remains the only viable and reliable source of ensuring both economic and physical growth. We have seen above how taxation in the real sense of it ought to be the bedrock of industrialization and economic development, but in Nigeria, the reverse is the case. Today taxation is alien to both the system and the people, the government have long over depended on oil that it has neglected taxation as a source of legal revenue.
But what is development, development according to Walter Rodney, is increase growth in decision making ability, human capacity, social and cultural values, and basic amenities that make life more meaningful. In this regard, for any country or state to be seen or regarded as developed, such must have good access roads, hospitals/health system, pipe borne water, improved standard of living for its citizens and residents, security, etc. However, government cannot achieve these without money, a continuous flow of income (revenue). It is instructive to point out at this point that, other sources of revenue are not as reliable as taxation; the reason is simple, the sudden fall of oil price has suddenly rendered states like Nigeria bankrupt, deficit budget and seeking foreign aids and loans. On the other hand, countries without mineral or natural resources but an organized tax system have consistently maintained a stable economy and steady but rapid development. The United Kingdom is a vivid example.
On this note, one can authoritatively say, for any country to develop and for such development to be sustained, the tax system must be holistic and comprehensive with a very strong enforcement system.
Taxation and Development: Beyond Federal allocation (Kogi Experience)
Just as the Nigerian government over depended on oil revenue to the neglect of taxation, Kogi state on its own have for over two decades of existence relied and depended on the federal allocation for its running, payment of staff salaries, security and above all development. This has caused the state a lot ranging from its low rating and ranking in the comity of states in Nigeria, backwardness, above all her subordition to the central government. The creation of more Local government areas, which was later scraped by the federal government whereas, that of Lagos state stood and of course still standing till date is a clear example also.
When one considers the total amount of Internally Generated revenue of Kogi state, one may be poised to say that, thinking of development or for any government to promise development is nothing but an illusion or imaginary creation. In 2014, i was in an interview chat with the Kogi State Board of Internal Revenue chair man, and he said his target for the year is 500m naira. I smiled and wondered in disarray of the total goal of the state IGR and i asked myself a simple question how can Kogi ever develop with this? How many roads can this amount construct or how many modern hospitals can we get from such tiny amount for a whole state? I believe you can answer the rest in your minds…….
How can we boost our tax system in Kogi state?
For us to develop a viable tax system such that can help us to grow and compete favourably with other states of the federation, the following must be put in place without hesitation.
Training for government tax officials
Sensitization and education of the citizens on the need and legal implication of tax
Mass recruitment in the KSBIR that is purely base on merit
Mobilization and corporation of the traditional rulers
Tax experts should be sought for to provide a comprehensive tax policy and system that will be all inclusive
Loopholes in the Board should be blocked
Conclusion
As bad as the situation portrayed above seems, the good news is that it is not totally hopeless. Kogi can still develop, compete favourably with top state like Lagos state and make life more meaningful for her citizens if only it can work on boosting and improving its internal generated revenue through direct taxation. Taxation is the only pregnant woman that can carry and deliver safely the pregnancy of our hopes.
Long live Kogi
Long live Federal Republic of Nigeria
– Olorundare Temidayo Destiny delivered this lecture on Kogi Patriots Platform
