Mitigating Corruption Through A Robust Tax Policy (Rebooted)/

In my civics class in high school, we were intimated to the fundamental basic needs of man - food, shelter and clothing. We were given the reasons why these basic things were fundamental to human existence. Food is for man to survive from day to day; shelter is needed to shield man and his loved ones from harsh environmental conditions and predators, while clothing is needed to protect mankind from the weather since nature short-changed mankind - without furs like other animals. These are what majority in a society must have, or have easy access to.

The celebrated Irish writer, Elizabeth Bowen wrote, "Everybody will tell the truth until there is something they must have". If you want to know the underlining cause of why a society like Nigeria is riddled with lies and dishonesty, you do not have to go too far. These basic things are the least of what the majority of the people in Nigeria must have; otherwise the Nigerian society will continue to be subjected to the present kind of embarrassed level of dishonesty. We might have, by default, institutionalised corruption unwittingly. 

I once wrote that corruption in Nigeria is a function of utilitarianism; that is, it has its utility - it could be as little as an individual effort to have access to a fundamental basic need the State has denied. Most Nigerian adults fall into this category. There is no society without corruption. However, in civilised societies, it is mostly exemplified at the top where those that must have power will lie through their teeth. Democracy is designed to balance the right against wrong; provided the ordinary people in that society are shielded from the lack of fundamental basic necessities that they must have. 

When two or more people interact, moral codes are automatically developed. Philosophers, over the years, have opined that one in five (20%) of any group will readily break the moral code of that group; with 3% of the twenty percent being dangerous. The survival of the group or society, therefore, rests on the conduct of the remaining 80% that would not readily break the moral code of coexistence. This is only valid if the majority in the society has easy access to the fundamental needs for existence. 

The only other option is a revolution. Europe was at a similar crossroad over two hundred years earlier; it was dealt with in two diametrically opposing views - a violent revolution in France and public education in Great Britain. At that time, continental Europe descended into an orgy of decapitating the affluents in the society; it was a philosophy that would later be institutionalised by Karl Max, a son of a noble (affluent). In Britain, it was through public education and that was championed by the Fabian Society (a group of academics) who saw an ominous cloud brewing between the haves and haves not. 

The violent revolution was short lived; in France it lasted just 10 years (1789-1799), but it consumed even the innocents. Whereas peaceful revolution (public education) took a while longer (about 50 years). The Fabian Society sensitised the masses of Britain about the virtues of paying tax, among other things; in the end, the rich started paying their fair share, and today even the palaces (the Queen) have cut down on their excesses and have started paying taxes. Unemployment benefits are borne by the rich, those in employment, and by employers. In the end, everybody goes home happy - the poor survives, even if it is on a pittance, and the rich goes to bed with their two eyes closed.

My not-too-poor friends are not comfortable with my arguments most times, but the country cannot run away from these facts. Nigeria has been run on rents (oil receipts) for far too long and the centre may not hold for long, unless we all pay our fair share. I have been campaigning for long that the Nigerian economy is bedevilled by three things - lack of strong policy on taxation; weak insurance policy and unstable foreign exchange. The foreign exchange has had the worst dent from the weak tax base. For as long as the biggest seller of foreign money (government) does not have a steady income through tax, it will always distort the exchange rate for want of more local currency to meet its Naira obligations. 

The other side of the double edge knife is that the un-taxed money in our pockets also influences how we bid for the foreign exchange. It is for this reason, that the executive order the Acting President signed the other day on tax issue is the best that has happened to this country since before the 1986 Structural Adjustment Program (SAP). Nobody wants to pay taxes, particularly the rich and the poor. The poor have been misled by the rich that tax money would easily be mismanaged by government. The Executive order is what has prompted this write-up (rebooted from an earlier article published in 2012 in NVS). 

A robust tax system would impact on the future our children. It could be what the father of modern economics, Adam Smith, termed the "invisible hand" in "The Theory of Moral Sentiments (Part IV, Chapter 1). Paying our fair share of tax in the society will trim off the excesses in our pockets that fuel corruption; inflation, and even sedition. Somebody said the day the poor start queueing up to pay their share of tax willingly, the super rich in the society will run away. It is natural for the rich not wanting to pay their fair share of tax, but it is an aberration for the poor to shy away from paying taxes when they have the most to gain from the pool of tax money. What is needed is sensitisation on the virtues of tax.

Tax money appears mystical as it leaves goodies in its wake. It is a revolving fund. A contractor, for example, is given a road to fix by the government; he goes to company A to hire plants to execute the job; he approaches company B to buy materials; he moves to the unemployment market to hire workers. The government then taxes the contractor, company A, company B, and the hired workers. In the end, the money paid for the contract goes back to the government treasury through tax routes for other purposes; the road is fixed, functional and the city looks beautiful; plus the social dividend of gainful employment that reduces the number of people roaming the streets looking for what to do to make a living. 

For long, the elites and the very rich have pushed out a strong propaganda that government is not to be trusted with tax money. That is self serving, because if everybody is made to pay their fair share, this group will pay much more, and they had rather not pay. Besides, it is more beneficial to the poor to be the first to pay his tax, because he has the most to gain. It also gives a sense of responsibility and the right to a voice within the community. 

The late Baroness Margret Thatcher once said, “When people pay nothing, they care nothing”. Payment of tax will make the people care about what the people in government do with their money. But why should the rich pay more? In capitalism, the State cedes the management of the country’s resources through a licence to some few individuals who are better managers; in return, they become rich, and they must pay their fair share for equity or their will be social upheaval.

Samuel Akinyele Caulcrick, Lagos.