WHILE launching the National Tax Policy together with the Tax Identification Number (TIN) recently, President Goodluck Jonathan not only fired broadsides at wealthy Nigerians and social critics for habitually paying little or no tax but also declared that it was only when the people paid taxes that they could talk of taxpayers' money. The question that immediately arises is: What constitutes taxpayers' money'Firstly, government depends wholly on taxes. Thus the Federation Account oil proceeds that are derived from petroleum resources found in some parts of the country are strictly taxes obtained from residents of oil producing areas. Secondly, whereas direct income tax is payable on earnings above a set threshold, which may exclude some individuals from paying income tax, the existence of indirect taxes turns every adult resident in the country into a taxpayer. So by virtue of paying resource wealth tax as well as direct or indirect tax, Nigerians are entitled to demand government's accountability for public revenue, all of which represent taxpayers' money.Now, before casting the first stone, President Jonathan, whose official emoluments began to be taxed from last month, should have made public in advance the content of his declaration of asset upon assumption of office together with any taxes paid on the assets. Indeed, as a mark of sincerity, top political office holders should update and make public yearly their lists of assets along with taxes paid thereon.Next, by directing the chairman of the Federal Inland Revenue Service (FIRS) to properly assess the wealthy and social critics, the president touched on a shortcoming of the adopted National Tax Policy, which proclaims a 'deliberate policy shift towards indirect taxation with respect to non-oil taxes.' Indirect taxation is adjudged easier to administer than direct taxation. Amidst the vast unemployment base, it is unfair to extort indirect taxes by raising value-added tax as the Joint Tax Board favours. Instead, when government uses available revenue to create the right conditions for the real sector to flourish with resulting fast reduction of the informal sector, both direct and indirect taxes become easy to administer on thriving establishments and their employees. Besides, for a comprehensive TIN database, various forms of tax administration should be fully embraced.In the light of the foregoing, the Jonathan administration should appreciate that it is very far from actualising government's economic mandate that is fully spelt out in Section 16 of the Constitution and which includes 'promoting national prosperity and an efficient, dynamic and self-reliant economy.' The country faces dilapidated infrastructure and collapsed or inadequate public services everywhere while the real sector suffocates in an increasingly hostile environment.But owing to the Federal Government's abdication of particularly its monetary and fiscal responsibilities over the years, most Nigerians, rich and poor in varying degrees, pay through the nose to take care of their own security, electricity and drinking water needs; they arrange supplementary coaching for their children in school; they grade or fill potholes in adjoining roads and streets while federal roads have been left to fall apart. The list of what has been left undone is endless. Do carping social critics not have a point'Notwithstanding Jonathan's call for improved revenue collection, government's all-round poor performance is not attributable to insufficient revenue receipts. The FIRS boasts setting revenue collection targets since 2004. As a matter of fact, financial data in the CBN Statistical Bulletin show that from 1972 to 2008, Federal Government budgets recorded current surpluses of varying levels in 31 years. But since overall budget deficits of far greater magnitudes than the surpluses did not result in the strengthening of infrastructure and government services, the picture only partially reflected how the economy bled.Therefore, it is apposite to note that published oil revenue figures from 1972 till this day are wrong and misleading. Since the floating of national currencies by the world's leading economies became de rigueur in 1973 following the cessation of the Bretton Woods system of fixed exchange rates two years before, neither has our national currency been properly floated nor have the country's oil proceeds been duly converted to realised naira revenue (or genuine taxpayers' money) via deposit money banks. In effect, published CBN oil revenue figures have always been CBN-financed deficit funds substituted for oil proceeds. Accordingly, the CBN financial data misstate total revenue and understate both the level of fiscal deficit and the national domestic debt totals. So all tiers of government expending excessive deficit funds provided by the apex bank rather than true taxpayers' money explains the persistent excess liquidity, the official national domestic debt made up preponderantly of sterilised liquidity surfeit, which cannot therefore be invested in tangible projects, high inflation, double digit lending rates, the sliding naira exchange rate, the hostile production environment that has crippled the real sector, the infrastructural blight, the expanding room for corruption and others.The adverse and high inflationary effects of the substitution of CBN-deficit financing for oil proceeds are falsely blamed by the monetary policy committee on expansionary budget spending. By end-February 2012, CBN-substituted fiscal deficit stood at 2.6 per cent of GDP (annualised 15.6 per cent) excluding the proposed 2012 fiscal deficit of 2.85 per cent of GDP. This year alone there is already a long list of known casualties of the excessive deficits: the 2012 budget was limited to 65 per cent of realisable oil proceeds to be substituted for and the sharing of Federation Account accruals was delayed with corresponding postponement of payment of salaries and pensions in order to slow inflation. Also for the sake of reducing inflation, the completion date for rehabilitation works on the Apapa-Oshodi Expressway is being delayed by over nine months (the fate probably shared by other sorely needed infrastructural projects like the National Integrated Power Project), thereby exacerbating unutilised construction capacity and unemployment. Similarly, to reduce inflation, payment for gas supplied to power utilities is not effected promptly, resulting in routine cutting of further gas supplies. The byproduct is the lengthening of blackouts across the country. Hence, official claims that the 2012 budget will create jobs are complete lip service as the Federal Government is instead sinking the economy.Yet by merely converting oil proceeds to non-inflationary realised revenue through deposit money banks for government expenditure, there would quickly evolve conditions conducive for enabling the private sector to access cheap bank credit and undertake yearly investments worth upward of 10 times the federal budget in any given year. That is the sustainable road to rapid economic development and bountiful tax revenue.The inflow of taxpayers' money since the 1970s (had it been appropriately converted) was more than adequate for government to bring about national prosperity, but the Federal Government's wedlock to faulty monetary and fiscal practices has been the undoing of the economy. President Goodluck Jonathan should end the long-drawn-out national economic misadventure.
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