Nigeria - The Taxman Cometh…

‘Taxes are the lifeblood of government and no taxpayer should be permitted to escape the payment of his just share of the burden of contributing thereto.’ - Arthur Vanderbilt, Chief Justice of the New Jersey Supreme Court, 1948 to 1957.

If you do not share the sentiment of Mr Justice Arthur Vanderbilt about tax, you are not exactly in bad company. Plato didn’t like the idea either. ‘When there is an income tax,’ the ancient philosopher wrote, ‘the just man will pay more and the unjust less on the same amount of income.’ Also, Winston Churchill once quipped ‘There is no such thing as a good tax.’ And consider Albert Einstein's position on this matter: ‘The hardest thing in the world to understand is the income tax,’ said the world's famous scientist. 

From the ancients to the moderns, tax has always had its blow-swinging sceptics. Pity the taxman then! He or she must be the least-loved of all public servants anywhere in the world, including Nigeria where Mr Muhammad Nami has just stepped into the line of fire as the nation’s No.1 taxman by virtue of his recent appointment as the Executive Chairman, Federal Inland Revenue Service (FIRS) by President Muhammadu Buhari.

It is public knowledge by now that Mr Nami is a certified tax, accounting and management professional with enviable qualifications. He holds top-tier professional practising licenses and has about three decades of practical working experience in auditing, management and tax advisory and management services to clients in the banking, manufacturing, services and public sector as well as non-profit organizations. However, you do not exactly get a man, woman or corporate giants to part with a slice of their personal or company income as tax by a wave of your academic or professional accomplishments, do you? Not in Nigeria, anyway, and you can begin to have an inkling of what huge national assignment Mr. Nami has just accepted at the FIRS.

Add the Federal Government target to raise an unprecedented N8.5 trillion in taxes this year –against the backdrop of the newly minted 2019 Finance Law, which gives a raft of generous, historic tax exemptions, reliefs and holidays to millions of working Nigerians, micro, small and medium enterprises (MSMEs) - then you should gain a clearer insight into the difficulty and complexity of Mr Nami’s duty call as the FIRS helmsman. He is expected – quoting another tax thrasher, Jean-Baptiste Colbert – to pluck ‘the goose as to obtain the largest amount of feathers with the least amount of hissing.’

Morning shows the day and Mr Nami, the consummate taxman, showed the stuff he is made of in mere days as the FIRS chief. Sampler:  Following his resumption at the FIRS on December 19 2019, Mr Nami directed the Service to do what many in and out of the FIRS thought was unthinkable and unachievable: process and issue Tax Clearance Certificates (TCCs) to all eligible taxpayers in just one month, a statutory duty hitherto encumbered by bureaucratic bottleneck. To the pleasurable shock of many taxpayers nationwide, the Feds at the FIRS happily and patriotically picked the gauntlet and issued out over 12,000 TCCs in 10 days! As you read this piece, nearly 30,000 TCCs have been processed and issued to taxpayers nationwide. This prompt rally of the FIRS workers by Mr Nami also raked in about 1.5% collection above the expected revenue yield from non-oil sector, bringing new taxpayers into the tax net.

The significance and life-changing impact of this seemingly magical churn-out of TCCs at the speed of light at the FIRS might be lost on my beloved readers if you are not an MSME entrepreneur or a small business manager whose business and means of livelihood, for instance, rests on government procurement and supplies. The TCC is the most authentic means to prove that your firm has not gone rogue on the Federal Government as a corporate entity by failing to file its tax returns diligently. Without the TCC, therefore, your business could be imperilled. For example, if you do not attach evidence of three-year tax payment to your procurement and supplies bid.       

Now, how did Mr Nami get the same bureaucracy, which has sat on thousands of TCCs for over two decades to deliver the same in matter of days? Is he a magician? Did he, like your quintessential WO2 to his stragglers-soldier rave, rant Samanja-esque and bully the workforce into action? Not at all! To be sure, Mr Nami is an amiable fellow, a taciturn gentleman, and certainly not a Professor Peller with the magic wand! Behind his placid mien, he is a strategist, a proactive achiever who would rather work hard and talk less. For a circumspect general does not reveal his tactical plans until he is ready to strike.

As a strategist, he knows how well to utilize human and material resources to get the FIRS cracking as to get thousands of TCCs out in a matter of days immediately he resumed at the FIRS. For one, the Nigerian media space was abuzz recently with the news that Mr Nami implemented a comprehensive staff reshuffling exercise at the FIRS as soon as he took charge last December. Add that to the quiet but effective institutional reforms Mr Nami promptly launched at the FIRS and you might just get your fingers on why the FIRS is suddenly working in overdrive on the watch of Mr Nami. And you will begin to understand why President Muhammadu Buhari went for Mr Nami to actualize the President’s vision for the tax sector.    

To be sure, Mr Nami is poised to do more at the FIRS and modernize the Nigerian tax system in line with global best practices as envisaged by the 2019 Finance Law. He is driven by the resolute conviction that Nigeria stands at the threshold of an unprecedented utilization of tax money by President Muhammadu Buhari to build sorely needed national infrastructure – even when the Federal Government only retains 15% of the much-debated new 7.5% VAT while the 36 states and 774 LGAs share the rest 85%. He needs all
the support Nigerians can muster as individuals and collectively as taxpayers, VAT-collecting business entities, FIRS staffers and the media.

By the way, their witty retorts to taxes and the taxman notwithstanding, Plato, Churchill and Einstein still went ahead to pay their taxes as exemplar citizens of Ancient Greece, Great Britain and the United States.

Article by Osigbesan Sultan Luqman