Open Letter To Senators And Members Of The House Of Representatives, Please Pass A Law On Taxation As The Principal Component Of The Budgets Of The Federal, States, And Local Governments
by Prince Abitunde Taiwo
Dear distinguished senators and honorable members of the House of Representatives,
With the collapse of the global oil prices, to do social justice to the people of the oil producing areas, and to provide the magnitude of the revenues needed to bringsocio-economic development to Nigeria, it is imperative that you pass a bill on taxation as the primary means to fund the budget at each level of government.
With the plummeting global oil prices, many states and local governments are unable to pay salaries regularly and meet other obligations. The federal government is also facing severe budgetary crisis, and the Nigerian people continue to face untold hardships including pervasive insecurity in both the north and the south
It is time for you to act. I appeal to you to act now to prevent the country from collapsing under the weight of security and socio-economic pressures and tensions.
I propose a progressive tax regime and recommend five tax brackets and a separate bracket for Diaspora Nigerians as follows:
1. Unemployed, retirees, pensioners, people with disabilities, and low income workers with incomes below three times the minimum wage: 0% income tax bracket.
2. Incomes from three times the minimum wage to less than ten times the minimum wage: 9% income tax bracket.
3. Incomes from ten times the minimum wage to less than twenty times the minimum wage: 21% income tax bracket.
4. Incomes from twenty times the minimum wage to less than 40 times the minimum wage: 36% income tax bracket.
5. Incomes above 40 times the minimum wage: 45% income tax bracket.
6. Diaspora income tax of 3%. Nigerians in Diaspora already pay high taxes in their host countries at a rate between 30% and 40%. The 3% Diaspora tax should be ameliorated by bilateral agreements authorized by you involving the federal government and the host countries.
A tax regime to provide the revenues that governments need and use is in accordance with global best practices, and the range that I propose is within the range employed by many nations in the world.
Nigeria has one of the smallest taxation revenue to GDP ratios in the world. Please see a reference below. Nigeria stands to raise over $200 billion US dollars annually with the taxation regime I have proposed which will be many times more than what can be obtained from the sale of oil in this volatile oil period. Thus, taxation will produce the magnitude of the revenue needed to fund the costly security and socio-economic programs needed tackle the challenges in the country.
I have deliberately chosen factors of three in the tax brackets to allow for a distribution of the tax revenues into three equal parts for each tier of government. Taxation will promote national unity and bring development closer to the people as two thirds of the tax revenues will go to the states and local governments.
The sacrificial payment of taxes to fund the operations of government will motivate citizen participation in, and oversight of, government, and encourage transparency, promote unity, and enable social justice to be done to the people of the oil producing states.
Please start the process now so that it becomes a factor in the debate and discourse in this election, and thus get the Nigerian people to weigh in.
Socio-economic development cannot take place in Nigeria without the sacrifice of taxation. Without taxation, Nigeria will plunge into deeper debt through borrowing to keep the government afloat, and the expectations of the Nigerian people for progress will not be met. Oil revenues alone, in this era of plunging oil prices, are woefully inadequate for the funding of the building of the imperatives for development: human capacity, physical infrastructures, and a robust security apparatus.
Thank you very much, distinguished senators and honorable members of the House of Representatives, for your service to the nation. May God bless you, us Nigerians, and our nation.
Sincerely,
Prince Abitunde Taiwo
Independent Presidential Candidate for 2015 Presidential Elections.
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