For whose benefit is Osun Economic Development Fund?

How I wish Nigerians will be assertive where issues that will directly affect their lives is brewing.

There is no shortage of new policies in Nigeria, often I wondered what politicians think of the general public, to be frank I think they think most Nigerians are not bright. Why did I say this? Well, why would anyone introduced a new policy without providing clear strategy of how proceeds will be spent to the contributors?

Osun state plans to generate internal revenue because federal government obviously has no money to distribute like in the past. This new policy is called Economic Development Levy (EDL).  This is to be levied on business owners. Most people in Osun state are business owners (worth of the business for most is another story). More than half of Nigeria population live in rural area, this is more evidenced in a place like Osun state. Rural infrastructure have been neglected for decades in Nigeria, Osun state is not exception.

To be clear I don’t think Nigeria can develop without all working adults contributing their fair share of taxes, I am in support of taxation. However, I do not think one can achieve this by imposing levies on all persons. Just walking down our streets, it is clear people have different economic strengths so imposing blanket taxes on everyone just because they have a stall of 5000k naira worth tomatoes is unfair.

The first thing that came to mind when I read the new policy was ‘can you please tell us what you intend to do with this new fund’. For years that Nigeria enjoyed high oil price, there is almost nothing to show for it in terms of infrastructural development, now that oil price has reduced significantly, (only in Nigeria) politicians want to retain all the perks, how can this be possible?

While I have loved some of Ogbeni Aregbesola’s policies, I just think this blanket cover of tax collection is a bad idea without stating clearly how and what he planned to use the fund.

In developed countries where they have managed to make significant progress in tax collections, people have lots of incentives to pay their taxes; public libraries, public parks, galleries, clean roads – all of these and others are accessible to all.

If Mama Olobi is now going to be faced with paying taxes based on the size of her stall, what is she getting in return? It will not be fair to collect money from Mama Olobi only to be told stories of civil servants salaries for example – if the state can’t afford to do some things as they used to, then maybe to let go of the excesses?

Secondly, is there going to be exceptions? How can you aim to tax every stall holders when we know that some people are clearly living from hand to mouth in our neighbourhoods?

If my 80+ year old mother who insisted on selling her worobo (petty trade) is approached to pay taxes because someone thinks she has money, (by the way her trade fund comes from my sisters and I), what is she getting in return? She has been on medication for high BP and diabetes for years, would she be eligible for subsidised meds?

Perhaps low oil price has exposed our states to reality of importance of self-sustainability, but one thing that we can all agree on is the inequitable of wealth distribution as our major problem – if all adults are now going to be approached to pay taxes, then the fund collected can not be used to service the unsustainable activities of the past, otherwise no progress in my opinion.

Taxing informal economy in a way that they are not worse off

For the last year or so, there has been an increasing emphasis on the need to tax informal economy in Nigeria, the excitement is across the nation.

As if it is new awakening that people in this category make money too. Well, the clue to the interest is the ever decreasing oil prices.

Last year I read with interest, notes from Nigerian economists (too many to mention) – I just have to shake my head. Not that they didn’t make sense but because I realised that for some reason a chunk of Nigerians have been walking around thinking the civil servants/office workers are the only one that should have robust disposable income.

This is ironic because even today, most Nigerians both male and female work in informal sector – from rural area to big cities.

Like our governor of Osun State, Ogbeni Aregbesola – his mother is called Iya Olobi (kolanut seller) for a reason.

 

Now, my state is making a lot of changes, creating more local councils and all. I don’t understand reasoning for many of these actions, but I hope those closer would have better understanding.

Which brings me to the point of the new tax cash cow that my people are just discovering – informal sector.

I am all for taxing; making everyone contribute their fair share to building our state/nation. However, there has to be a defined formula to follow so that people here are not worse off.

Whether it is Akara Osu or Dodo Ikire or indeed Mama Olobi that we want to tax to raise revenue – it has to be fair if we ever want to get it off the ground at all.

I read somewhere where Ogbeni Aregbesola stated that he was trying to emulate what has worked in other countries (or something like that), that is great. One of the purposes of taxation is to create social welfare where there is a pool of fund whereby everyone contributes to and then redistributed so that the least of us are not worse off.

Significant part of tax fund goes back to maintaining communities in the west – Public schools, libraries, museums, recreation centres etc – these help to ‘cushion’ tax burden for people because they can see and be beneficiaries of their contributions.

This means that everyone in principle pays according to their earnings. With no exceptions.

I think it is a misconception that people don’t want to pay tax in Osun State for example, people just don’t want to ré èsun s’ínú ibú (taking from the pond to fill ocean).

Most people in informal sector in Nigeria have no pension waiting for them so they put all their earnings on educating their children (those who chose to). If they don’t work, no kobo comes in – as simple as that. If they fall ill or any of their family does, they may end up loosing every kobo paying medical bills.

Too many people close to me lost all their money this way, and in some cases life.

So if we are going to successfully charge informal sector, people need to see this money being put back into our public schools including our villages – too much money waste of useful cash/time for needless travel for the villagers.

Many of our people will never make it beyond secondary schools – let’s make it worth while for everyone not just children of folks in offices and towns.

If villagers’ money is good enough to contribute to building revenue for the state, they deserved improved schools (like the new ones) too.

Osun a maa dara si