By Sunday Iduh
The dynamics of any revenue law keep changing from time to time. The oiling of government hinges on internal generated revenue. It is in the light of this that the Benue State House of Assembly recently amended the International Revenue Administration Law.
It would be recalled that during the 8th Assembly, there were quantum of agitations from tax payers, officials of ministries, departments and agencies as well as institutions, pointing to some unfavourable aspects of the revenue/tax laws. The current 9th assembly has done justice to the agitations.
With the amendment, more ministries, departments, agencies and institutions which render essential services will retain 75% of their Internally Generated Revenue (IGR) and remit only 25% to government.
The amendment which expanded the number of board members and adopted a flexible quorum for ease of revenue/tax administration also moved the supervision of the Internal Revenue Board and the Benue Internal Revenue Service from the Ministry of Finance to the office of the governor for closer and efficient supervision.
Another very important aspect is the harmonization of existing tax structure in order to eliminate or reduce the burden of multiple taxation on the populace.
Governments all over the world impose charges on their citizens and businesses as a means of generating revenue, which is then used to meet their budgetary requirements. This includes: Financing government and public projects as well as making the business environment in the country conducive for economic development.
Without taxes, governments would be unable to meet the demands of her people. Taxes are very important because governments collect this money and use it to finance social projects, some of which include: health, education, governance, among others.
Without taxes, government contributions to the health sector would be unachievable. Taxes are used for funding health services such as social healthcare, medical research, social and security well being.
Education could be one of the most deserving recipients of tax money. Governments attach a lot of importance in the development of human capital and education is central in this development. Money from taxes is used to funding, furnishing, and maintaining the public education system.
Governance is a vital component in the smooth running of country affairs. Poor governance would have negative effects on the entire country with a heavy toll on its economic growth. Good governance ensures that the money collected is utilized in a manner that benefits citizens of the country. The money also goes to payment of public servants, police officers and members of the legislature. It is also chanelled to infrastructure development, transport, housing, among others. Indeed, without proper and functioning system of governance, there will be no effective protection of public interest.
Aside social projects, governments also use money realized from taxes to fund sectors that are crucial for the wellbeing of citizens such as security, scientific research, environmental protection and so many things.
Some of the money is also used for pensions, unemployment benefits, childcare, and many more. Without taxes it would be impossible for governments to raise money to fund these types of projects.
Furthermore, taxes can affect the state of economic growth of a country. Taxes generally contribute to the Gross Domestic Product (GDP) of a country. Taxes help propel economic growth which in turn has a multiplier effect on the country’s economy; raising the standard of living and increasing job creation.
Governments also use taxes as a measure against some undesirable activities such as the consumption of liquor, tobacco smoking among others. To accomplish this, governments impose high duties on these products and as a result, raise the cost of these products to discourage people from buying or selling them.
For business to thrive in the country, there has to be good infrastructures such as roads, telephones, electricity, among others. These infrastructures are developed by governments or through close involvement of the government. When governments collect money from taxes, it puts this money back into the development of these infrastructures and in turn promotes economic activities throughout the country.
Taxation is also important to businesses because governments can plough this money back into the economy in the form of loans or other funding platforms. Taxes help raise the standard of living in a country. The higher the standard of living, the stronger and higher the level of consumption. Businesses flourish when there is a market for their products and services. With a higher standard of living, businesses would be assured of a higher domestic consumption as well. Taxes are essential and every citizen is meant to reap benefits of these taxes. This is why it is important that citizens endeavour to pay taxes and understand that it is meant to be more than just a “money bag” for the government of the day. It is incumbent on the government to put these taxes to proper use to encourage the citizens in the payment.