Tax Clearance Certificates for Sale … to tax evaders for eligibility to manage taxpayers’ money
Background
Economies thrive when the social contract works. Government derives its powers from the people who contribute their resources mostly by way of taxes in returns for social services, rule of law and good governance.
S.24(2)(f) of the Nigeria Constitution requires every citizen to declare his income honestly to appropriate and lawful agencies and pay his tax promptly.
S.3 of the Personal Income Tax Act (PITA) imposes tax on the income of every taxable person for each year of assessment from all sources inside or outside Nigeria including salaries, business profits, rent, interest, and dividend. S.41 mandates every taxable person to file a return containing true and complete statement of income annually with the tax authority of the State in which he is a resident. A fine of N20,000 and a daily penalty of N2,000 is applicable for failure to file returns and pay taxes due in addition to imprisonment for 6 months upon conviction.
S.85 of PITA entitles a taxpayer to a tax clearance certificate (TCC) where tax assessed for the previous 3 years have been fully paid while S.85(4)(s) mandates that a TCC be demanded for appointment or election into public office.
However, S.137 of the Constitution disqualifies a person who is under a sentence of imprisonment or fine for any offence from contesting for the office of President (similar to other sections regarding other political offices).
Context
Nigeria has a revenue problem because many people evade taxes. Tax evasion is the illegal non-payment or underpayment of tax. Any aspirant who is just paying to ‘buy’ a TCC for political screening purpose is a tax evader (who is lucky not to have been convicted).
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Various tax authorities have issued notices of taxes to be paid by political aspirants seeking to obtain tax clearance certificates for their screening for elective positions.
Sadly, there is no focus on whether these aspirants are legally and morally eligible to superintend over taxpayers’ monies. Ironically, many of the aspirants are even “shopping” for TCC in states where they can pay the least amounts notwithstanding where they are resident. ?
Tax Revolution to the Rescue
The idea is to disqualify corrupt politicians and tax evaders using non-compliance with tax filing and payment and pave the way for credible candidates given that it takes people of character to declare their income honestly and pay their taxes promptly.
Unfortunately, the Court of Appeal in KOLAWOLE & ANOR V. OYELEKE (2011) held that payment of tax as and when due is not a requirement for eligibility to contest an election under the Constitution.
While we need to amend the Constitution to specifically make tax compliance an eligibility condition to contest an election, those who have failed to declare their income honestly (by filing a return) and pay their taxes promptly can still be disqualified under the Constitution if they are convicted under the PITA for failure to file returns and pay their taxes.
Also, we should connect the dots regarding the amount of taxes paid, election spending, assets declaration and overall net worth of aspirants.
Read the news on tax clearance shopping here: https://dailynigerian.com/kano-politicians-besiege/
Experienced Professional in Public Financial Management, Tax and Revenue Administration, International Development and Financial Services Sectors
9 个月Great article! Plenty of collaborative work to be done here. I recall in 2022 under the auspices of the JTB, we engaged with INEC, CCB and ICPC on sharing information to properly assess and tax politicians. This needs to be sustained and continued.
PINL
2 年I am so enlightened with this piece... more of it Sir.
Writer at Questkonconsultancy services and Business Services
2 年I like this post
Public Servant at Kwara State Internal Revenue Service
2 年Sir, it's a good initiative. But honestly speaking it should be beyond the politician alone but all other's purposes for which demanding TCC is a condition. For example, failure to file your annual return and up to date in the payment of your either personal income tax or payee for those three proceeding years, Then such persons should not be issued TCC for any reason. Even under remittances and deductions, such individuals should not be issued TCC, this initiative will put the employers of labor on their toes to do the right thing. While the employees will follow up on their payee remittance from their employer and prevent under remittances .Since they will be aware of the consequences of such practices.