LETTER TO MR PRESIDENT – 2

His Excellency, in my first letter – a preamble – I gave a general tone of my thinking. It stemmed from my belief that the fundamentals for our development are flawed; your experts are free to dispute this. The greatest obstacle to our progress is the funding of our public treasuries, not much of government spending; this is the reason many people belief that oil is a curse to Nigeria and not a blessing. It is extremely sad that the country’s budgets, after 40 years of oil receipts, still remain a function of oil benchmark. This is unacceptable. Though a lot of the oil earnings have been spirited out, illegally, Nigeria still remains a wealthy country. What is lacking is a proper mechanism that harnesses the potential of Nigeria and its great people, with the little that is left. We often hear that part of the problems is greed. However, greed is a natural phenomenon of all creatures of self interest, which we all are. Our evolution to the next level will be judged by actions that transcend this natural phenomenon. This is the time to start to reason outside the oil box.alt

Mr. President, with due respect, let me start to say nobody epitomizes the crazy level of inequality, in Nigeria, more than yourself; look at where you were coming from, look at where you are today – imagine the gap, but millions of Nigerians still remain at your former station in life. There is inequality in every society, but our own level is horrifying. Take for instance something as basic as light; elsewhere, the super rich and the stark poor have light 24/7. Here in Nigeria, the rich still has light 24/7, but the poor that used to have, maybe, 3 hours of light a day from his generator can only afford two hours a day due to the increase in the price of petrol. You have, by increasing the price of PMS in January, widened the gap of inequality in Nigeria – maybe by default. Your explanation that the rich also enjoys the subsidy is unconvincing. Yes, you cannot discriminate at the fuel pump, but you could have taken the subsidy from the rich through a discriminative tax program that make the rich pay their fair share.

In my argument, I have figured out that a robust tax system is what is needed to solve all the multifarious problems that beset this country. I intend to link tax with each one of them at the appropriate time. The issue of subsidy is one. His Excellency, in a developed economy, the poor is shielded from the use of PMS. He rides on a diesel driven bus; rides on a diesel or electricity driven train; does not have to generate electricity not to talk of generating with PMS – no business with “I-better-pass-my-neighbor; does not have to ride on Okada, tricycle, or danfo bus; his goods are transported on diesel driven trucks or trains and etc. When we get to that level, we could raise the price of PMS to 500 naira a litre without hurting the majority of Nigerians. Maybe then, we could even subsidize the price of diesel, because the rich will not have any need for diesel when there is a constant power supply. Taxing the rich could have solved the thorny issue of subsidy of a key commodity like PMS.

My next line is to link tax to the fight against corruption. In the United States of America, in the 1930s, that country was faced with some illegalities perpetrated, notably, by the mafia. America battled with the scourge of the mafia’s crime, just like our own corruption, with the use of tax evasion laws. Al Capone, the notorious mafia, was convicted on tax evasion in 1930, when it had been difficult to nail him on the proliferation of crimes. Today, most of the mafia bosses are behind bars serving jail terms for tax evasion and not for the nefarious crimes they committed; they have also lost most of their ill-gotten wealth to the Inland Revenue System (IRS). Tax once again! We could use evasion of tax laws to mitigate the war against corruption. For example, the man that did away with the Police Pension Fund should have been nailed for not paying “Uncle Jonathan” (an acronym for Federal Tax). He would have lost all that he stole back to the treasury.

Mr. President, it is true that only you cannot solve Nigeria’s problems – newspapers report; but if you consider my alternative means to solutions, instead of those of your paid experts that have a different agenda, you could create vehicles to solving our multifarious problems with one-fix-it. Tax will remain, for a long time, the instrument for equity in a capitalist economy. Let’s look at how tax works in a place like the United States of America, the most capitalistic nation. The City Hall worker collects his pay on Fridays. From that paycheck, he pays for his mortgage; services his car loan; puts food on the table; clothes the family; visits the dentist; goes to the movies and the theatres, etc. Each of these units is taxed by the City Hall, and by Thursday, his paycheck for the coming Friday is back to the City Hall treasury. He, in turn, would have rendered a quality service to the city. That is how the government overhead is paid for and not from the proceeds of oil.

Let us look at another tax wonder. Company A gets a government (City Hall) contract to fix a 10 kilometre road. Company-A approaches Company-B to hire plants to execute the project; Company-A goes to the unemployment market to hire workers for the project, and Company-A goes to Company C to buy the materials to do the projects. The City Hall taxes Company A, B, and C, as well as the workers hired for the project. By the time the road is completed, almost all the money for the road construction is back to the City Hall’s treasury through the tax route. The ensued beautiful road is the bonus, but every aspect – Company A, B, C, and the workers go home happy and the process is recycled again and again. It is through government spending that we could create jobs, and it is paid for through tax. The tax route, yet again! Tax could be the cornerstone to solve one of the major problems in Nigeria – unemployment.

Mr. President, as we celebrate the 52nd Birthday of Nigeria, I enjoined you to break from the ranks and move the country from the claws of darkness. This is a golden opportunity. The time is ripe to set targets that will move government overheads away from oil receipts. A maximum target of 30% of oil revenue to fund government overheads, backed by a bill, is not a bad start; this would tend towards zero percent in the future. In doing so, we would change the rattling dissonance of our country to a sound societal structure. Seventy percent of oil revenue could then fund the regeneration of infrastructure across the land, both at the state and federal levels. This would provide massive employments and increase tax revenue. The greatest obstacle is how to convince the rich that it is in their interest that they pay their fair share to the society. It is the rich that knows how to be rich that will still make their money from increased government spending. God bless Nigeria!

Samuel Akinyele Caulcrick

Lagos.