The importance of taxation cannot be overemphasized. And, the most important purpose of taxation is to raise resources for governments to deliver essential public services. Therefore, Governments use them to build or pay for many of the things that are fundamental for the good functioning of the countries, namely, health care, schools, roads, other government projects and social services. That’s the social contract, between the governments and their citizens. Most economists observe that “It is important to look at both sides of the equation – not only taxes collected, but also how the money is spent to improve lives and well-being of the citizenry.”
Anambra State’s new tax directions made news headlines within the past few days, following innovative tax policies initiated by the four-month-old administration of Gov. Chukwuma Charles Soludo, CFR.
The tax reforms in a revolutionary manner made tax payment and collection easier, more accountable to the people and lesser challenging to the people. It also makes citizens pay lesser in a novel ‘win, win’ that favours the populace and the government.
The governor, a renowned professor of Economics and man of global repute and former Governor of the Central Bank, CBN who took the mantle in Anambra State on the 17th of March 2022 brings his experience and reputation to bear on the reforms. As one whose stewardship at the apex bank was marked by many ‘firsts’, administratively and economically, he shows his grasp of development and economic issues in the new directions in taxation in Anambra.
An informed peak into the reforms will enable better understanding and lampoon the reasons for the protests, which suddenly came almost simultaneously from two opposing groups on the matter under discussion. Good consideration of the larger picture of what Anambra really needs and the Soludo government’s determination to pursue its administrative dreams will buttress the grounds for the new policies.
The tax reforms for instance entail a complete overhaul of the tax payment method in the state, where individuals who often times are not even state actors gained the system. They were hired to collect and also enforce the payment of internally generated revenue from businesses, persons and others. Under the falsehood that they were “remitting the collected sum” to the government purse, they lined their pockets and defrauded citizens. The collectors or their agents either diverted part of the sum to some private accounts as well as other areas of their own interests or never credited the tax payers appropriately. Taxpayers did not even know what they were expected to pay and which government agency they were to pay to duly.
In a bid to cut off the practice that enthroned dubious proxies and multiple taxation that were existed before Soludo’s era, the new government took a bold step in the new order. First, the government published exact figures of taxes meant for bodies and groups such as transporters in the state. For instance, a breakdown of what the commuters will be paying as taxes henceforth is contained in an official release made by the Anambra State Internal Revenue Services (AIRS). In a release signed by Mrs Silvia Tochukwu-Ngige of the Head, Taxpayer Education and Enlightenment Team of AIRS, operators in the sector are expected to pay significantly lesser than what they used to pay. They are also saved from the brutality and bloody extortion of roadside, motor park thugs (Ndi Agbero) as well as the violence and accidents they are exposed to by the pre-existing situation. In a development that represents radical reduction in the amounts the operators pay, it is calculated that the commercial motorcyclist, Okada, rider will now pay N300.00 daily which a…