Can states be sustained by tax payers money?

                                                                                  

Nigeria operates federal system in which power devolves between federal units, the federal states, and local government.

The Constitution of Federal Republic of Nigeria 1999 (as amended) contains ample provision that regulate the generation and disbursement of public revenue between the federating units specifically, it provides that the federation shall maintain a special account to be known as the federation account into which revenues accruing to the government of the federation shall be paid.

Incidentally many states in the country depend on statutory allocation. Over 75% of the states annual Bridget is financed by statutory allocation from the federal account.

The fiscal law that empowers the state to make fiscal expenditures also empowers the states to generate their fiscal revenue for the purpose of meeting their expenditure needs.

The general observation is that most of the state depends on federal government for their revenue while making independent expenditure plans.
It is also observable that most of the states have potential not only to be fiscally independent, but also play its pivoted roles in assisting local governments and town unions.

It is basically against its background that the Community Action for Popular Participation (CAPP) Onitsha in partnership with Christian Aid, has embarked on this study in Anenton state to scope the current tax regime in state and to unveil the lapses which have left the state among those states that still depend on the federal Government allocation to finance over 75% of their annual budget.

APGA government in the state has provided succors to investors through Devine intervention Chief Willie Obiano who has laid to rest insurgency of kidnapping, armed robbering, and other vices which had impeded commerce and industrial growth. The net of good roads, micro credit facilities and other dividend of democracy delivered to the citizenry demand that we should give to Ceaser what are Ceasers.

However one of the major findings of the study is that the current tax regime in Anambra state favors neither the state government nor the tax payers. The system crates room for several forms of sharp practices that make actual tax revenue much less than potential tax revenue. Another striking issue according to the studies relates to tax justice in the state.

Tax burden was found to very high on poor firms and individuals in the state and comparatively low for rich firms and individuals.

There is also an issue of wrongful application of force by tax agents in the field. All these could create impression that the government is yet to recognize tax payers as partner with government in achieving its set goals.

Agreeably, CAPP believes that the study has been made to proffer at least one recommendation as a way of improving on the current tax regime in Anambra state.

It also believes that if there are states in Nigeria that should depend on federation account, Anambra, should be one on account of its age long features of the state as  major commercial venue centre in the South East.

According to the scoping exercise in the state, the state is well known for its inclination towards trading and manufacturing. It is also a fact that the state leads the pack, among the Igbo-speaking states of the South East whose indigenes are renowned of enterpreneurship, therefore largely due to the presence of vibrant commercial and industrial areas in the state. Majority of the households in the state are involved in commerce, industry and service delivery.

This is the reverse in other parts of the country where most of the households are involved in conventional work or civil service job, Based on this, it poses a serious threat to revenue collection as taxes cannot easily be deducted at source , as it is the case with employees in formal setting.

On the other hand, it poses a great opportunity for governments’ efforts at enhancing the development of business environment in the state to go a long way as bringing about satisfactory service delivery to the citizens.

Such satisfaction in government service delivery will motivate the citizen to pay their various taxes and rate as may be imposed on them by the government. Again, government provision of business support services to micro and small business across the state will also be very helpful in developing a condusive business environment in the state, which will go a long way in attracting more investment into the state-thereby creating employment, raising tax revenue base and yielding other forms of reliance to the government.

In the advanced countries of the world, governments declare how they judiciously use tax payer’s money. This is usually done as away of promoting transpiracy and a\accountability in governance, such disclosure on the part of the government is also used as a tool for checking fiscal responsibility and prudent management of public sector finance.

From the scope of studies, tax revenue in the state is not even enough to pay salaries not to talk of sustaining the developmental strides of the government.

However, Government should focus on its serious revenue drive and closely monitor agents of government to minimize the short practices. There are a lot of leakages.

These measures if adequately applied tax revenue can sustain developmental programmes even go a long way in paying salaries of workers as it is done in some advanced countries.
BY CHIKE IFEDI FROM ONITSHA