Taxes and the rentier state
Solomonsydelle, who writes the blog Nigerian Curiosity from Maryland, offers an explanation of the relationship between taxes and democracy that is fit for a textbook. While he's writing about Nigeria, we should ask whether the argument holds true for other states? Mexico? Russia? Iran? How would your students evaluate the argument?The first comment on this entry (at the blog site) offers some details on the taxation system in Nigeria.
TAXES - ACCOUNTABILITY & REVENUE IN NIGERIA
The concept of paying taxes, be it federal or state, is relatively foreign to many Nigerians.
Unlike some parts of the world where almost everyone, regardless of their position or income pays some form of income/revenue/property taxes on a regular basis, taxes are only collected from some Nigerians and some businesses.
Many argue that this reality contributes to a lack of political accountability on the part of officials and consequently, diminishes the impact of democracy on average Nigerians. But, just as important, the lack of a formal tax structure means that many state governments... over rely on the federal government for income and as such, the amount needed to cater to citizen's needs is limited. This is undoubtedly a serious problem during the current economic slowdown. However, the Nigeria Governors Forum has announced that come fiscal year 2010, state governments will begin to collect taxes from many more residents...
During the Nigeria Governor's Forum recently held in Abuja, Adams Oshiomole, the Governor of Edo State appealed to fellow governors to be responsible with revenues colllected via taxes. Specifically, he stated, "If the peoples' votes count, they will willingly pay their taxes because they trust their leaders. But if the leaders are not the true representatives of the people, they will resist whatever tax imposition. They will tell you that we didn't put you there..."...
Nigeria's state governors have historically overrelied on their portion of federal income to finance local needs. This push by the Nigeria Governors Forum to increase Internally Generated Revenue is a step in the right direction towards financial autonomy for states, and possibly, true federalism. Only time will tell, however, if many states will take the adequate steps to create a transparent and efficient tax stystem that will be deemed legiimate by residents and thereby supported. One thing is for certain, a tax system that works at the state level will empower citizens and increase state revenue, potentially a bonus for everyone.
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Labels: economics, Nigeria, political culture, politics
posted by Ken Wedding @ 6:09 AM
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