Nigeria to tax business class tickets and jewelries to plug revenue

A non-committal response was given to the eager and question wielding crowd by Nigeria’s finance minister Adeola Adeosun, on what her thoughts are on the government’s plan to tax first class, business air tickets and luxury coaches. This plan according to government, is in line with the new tax drive aimed at boosting revenue. The move is almost three years after the previous administration signed the initiative among numerous ways to boost revenue following the decline in oil price in 2014.

In a country were most of the tax are paid by the poor and the middle level income earner while high-net-worth individuals pay little or no tax this news might be a welcome development if it includes the influential high-net-worth individuals and political leaders alike. In an editorial on the Guardian, it was observed that high-net-worth individuals pay little or no tax when what they pay is either related to the value of resources and assets in the economy they have cornered for themselves or against what public servants pay. Their tax payment was even considered inconsequential given that there is less drive by tax authorities to collect from the wealthy.

In the Facebook interaction, the minister said, “We’ve signed something that will bill access charge on first class and business class tickets; we are just doing the final part of the implementation and we also want to try and amend the tax payer book on high-end luxury goods: cars champagne, brandy, whiskey, wine, jewellery, high-end jewellery.”

Speaking on high end jewelleries and champagne, are citizens expected to declare their jewelleries and wines also? How would the government come up with the conclusion that a jewellery is high end?

Addressing the question on how it affects its citizen? Adeosun said “Every poor nation has very poor tax compliance rate and every rich nation has high compliance rate. So, we want to be a prosperous nation. If everybody pays, there will be far more money in the pool to be spent on the services that we need” in another statement she said, “These things are what we call public goods, and they are funded from taxes. If you have been all around the country, you’ve seen the need, you’ve seen the number of people that are living in poverty, we can lift people from poverty if we have the right money”.

On the issue of far more money in the pool, we begin to ask ourselves were all the money recovered from the whistle blowing policy was spent on that Nigerians need to be taxed than they already are, in other to have far more money in the pool. The minister mentioned that people can be lifted from poverty, if the government has the right money. Does it mean the money recovered from looting is not the right money? On the Federal Ministry of Finance website, N11,635,000,000 was recovered from looters through the whistle blowing policy. The policy launched in December 2016, led to the recovery of substantial assets that were illegally acquired by various individuals.

While assuring Nigerians that the proceeds would be deployed into turning Nigeria into what it was in the past, she also mentioned “We need to build more schools, we need to build more hospitals, we need to build more roads”. “A lot of people that are very successful today were educated in public schools because the public schools were good; we can recreate that. Same with health system. A lot of people die needlessly because we don’t have the right health facilities”

Most states in Nigeria already has schools occupied by grasses and weeds, hospitals with non-functioning equipment’s and roads with deadly potholes. Rivers state for example has new schools built by the former governor, Rotimi Amaechi that are not used because of lack of teachers in them. Most of the Federal Medical Centres and hospitals in different parts of the country are dilapidated and instead of working on the already existing schools and hospitals to make them better for the citizenry, we are considering building new ones that would go bad in a couple of years due to lack of maintenance.

This is not rocket science the minister said, every country has challenges, there is nothing we are facing that other countries haven’t faced. However, she clarified that Nigerians living and working abroad, and paying taxes in those countries do not have to pay taxes in Nigeria.