18/12/2024
KEYNOTE ADDRESS BY PROF. ALI AHMAD AT THE STRATEGIC MEDIA SEMINAR THEMED THE ROLE OF MEDIA IN PROMOTING TRANSPARENCY AND ACCOUNTABILITY IN TAX REFORMATION LEGISLATION ORGANISED BY NUJ-SOBI FM CHAPEL IN COLLABORATION WITH NIGERIAN MEDIA PARLIAMENT (NMP) HELD ON WEDNESDAY, DECEMBER 18, 2024 AT THE SOBI FM CONFERENCE HALL IN ILORIN
COURTESIES:
Distinguished Guests, Esteemed Members of the Press, Ladies, and Gentlemen.
It is an honour to stand before you today to address this crucial seminar on a topic that lies at the intersection of governance, transparency, accountability, and societal progress. Today, Nigeria is at a taxation crossroads: the 2024 Tax Bills, to be or not to be? I doubt if my being a former legislator did not weigh heavily on the decision of the organisers to invite me to this important dialogue, knowing that I am far from being a
tax expert. But I have chosen to focus the address on the perspective of our encounter
with tax legislation in Kwara State.
Taxation, as we all know, is the backbone of any nation's development. It is the
lifeblood that finances public infrastructure, education, healthcare, security, and
countless other aspects of governance. Yet, taxation often encounters resistance, misconceptions by the people, and mismanagement by the government, leading to
erosion of public trust. This is where the media comes in, as both a watchdog and a bridge between lawmakers and the public.
However, before I go any further, I need to ask us if we are acquainted with the push by
Elon Musk of the United States to establish what he refers to as DOGE, Department of
Government Efficiency. His plan is that no sooner has President Trump established his second-term tenure than he will launch the DOGE. Under this department, he seeks to
create a tool where people will see how their tax money is being allocated, thereby
cutting wastages by government officials. It has been proven that there is a strong link between compliance with tax laws and transparency in tax administration.
In this regard, it is pertinent to bring to fore one's experience in the management of tax
funds of Kwara State. This approach is beneficial in explaining the germane issues of transparency and building trust with taxpayers.
In Kwara State during the second-term administration of Governor Abdulfatah Ahmed
in 2015, the KWHA reformed our tax regime to widen the tax net and centralise tax collection but without necessarily increasing tax rates. Included in the law was a provision for the cost of collection, which was usually 10% for tax agencies. For
accountability purpose, the KWIRS must submit its budget proposal capturing the
mode of utilisation of the fund to the KWHA before incurring expenses from the 10%.
But slightly unlike other agencies, the law further included a provision mandating
KWIRS to allocate 3% of that cost of collection as an intervention fund for carrying out essential projects across the state which the State Government might not necessarily attend to in a timely fashion.
The feedback we got then was that this approach resolved two issues: Transparency as
well, as Building trust among taxpayers that their tax money was being properly
utilised, thereby eliciting voluntary compliance with tax law provisions.
At a more profound level, our government was creative, and we agreed that the KWHA
should also enact a law that would establish an Infrastructure Fund. This was after the Assembly turned down the request of some 21 Billion Naira bond by the executive arm.
By the law that was subsequently enacted, KWIRS was required to warehouse
N500,000,000.00 (or 50% of its total collection then) with the Fund. The sums so warehoused were meant to fund the identified major capital projects for which the bond was to be taken. So if you multiply N500 million monthly by 4 years, you get N24Billion, even more than the bond figure. And this was with no transaction costs such as interests and other charges.
The law establishing the Infrastructure Fund came into being in January 2016, but the
executive arm did not start implementing it until September of that year, when the Fund should have generated about N4.5 Billion. It was that month that the State
received an extra-budgetary cash windfall from the Federal Government, possibly from
the Excess Crude Account. Both the legislative and executive arms then agreed to deduct from the windfall of N4.5 Billion and warehouse it with the Infrastructure Fund. Since then, until the end of the Abdulfatah Administration, the Fund was being credited with the monthly amount as prescribed by the law.
From the above illustration, even if the arrangement was not as comprehensively
conceived as that of Elon Musk's DOGE, it was cut to fit our reality for a period of 8 years before now. The State tax regime appeared to be transparently collected, disbursed, and managed. The Government had the required voluntary compliance with the law. That is a lesson that should not be lost to us in Kwara State.
Now, what is the role of the media in the current situation?
Indeed, the role of the media may not be prominent in all situations of lawmaking
depending on the dictates of interests. Where there is an intersection of interest between government and the governed, less attention may be required than where you have divergence of interest. In almost all cases, however, taxation legislation is one area that government and the citizens disagree naturally. The Government wants more money, while the citizens decry parting with more of their funds. This is where media practitioners should perform the most important role.
In addition, people generally miss the most important factor that defines the role of the
media in any public law endeavor. They fail to appreciate the fact that even though lawmakers make laws exclusively (except that they forward the laws to Mr. President for assent), they do not make laws exclusively themselves. They do not make laws only for the government either, nor for a chosen elite.
They make laws for the generality of the people. To that extent, the media should occupy the most prominent position in the entire process of lawmaking.
That is the reason that in South Africa, the rule of lawmaking in the countrự's constitution (S. 72 of South Africa Constitution) makes public hearing a mandatory requirement the absence of which nulliftes any law passed by the country's legislature and assented to by the President. In Nigeria's legislative practice, public hearing is just customary; in South Africa, it is mandatory, a constitutional requirement.
In the South African case of Doctor for Life International v Speaker of the National Assembly, the court was saddled with the vital question about the scope of the duty to facilitate public involvement. The Court held that failure of the legislature to facilitate
submission from the citizens nullified the effect of both passage and presidential assent
to the laws.
Therefore, in the context of tax lavws where you have divergence of interest between the government and the citizens, the role of the media becomes particularly heightened especially because of the limited time-frame available for dissecting the tax bills.
This is where the element of trust has been identified by many speakers as critical. Per these analysts, citizens' public trust regarding management of public finances, including revenues from taxation, is very low. The media is under obligation to hold government accountable on the management of existing tax revenues. The Government has inundated taxpayers with figures alluding to the fact that its income consistently exceeds budgetary projections, yet taxpayers complain about lack of evidence in efficiently utilisation of tax proceeds for the benefit of the people.
Transparency and accountability are not mere buzzwords; they are the bedrock of sustainable governance. A transparent tax system ensures that citizens understand how taxes are collected, managed, and utilized. Accountability guarantees that public
officials, institutions, and agencies are held responsible for their actions or inactions in
tax administration.
When these principles are lacking, the consequences are dire: public distrust, tax
evasion, corruption, and a weakened social contract. Therefore, tax reformation
legislation must not only address the technical and legal frameworks of taxation but
must also ensure that these reforms are effectively communicated to and accepted by the populace.
The media is often referred to as the fourth estate of the realm, and rightly so. In the
context of tax reform legislation, the key roles of the media are evident in the following areas: Public education, advocacy and agenda setting in order to shape public perception, bridge-building between government and the citizens and promoting
accountability.
The media has a duty to educate the public about the importance of tax reforms,
explaining complex legislative changes in simple terms. By demystifying tax laws and
policies, the media empowers citizens to understand their rights and responsibilities
Through investigative journalism, editorials, and public debates, the media can
highlight inefficiencies, injustices, or corruption in tax administration. Public perception of taxation is often shaped by narratives in the media. Positive, factual, and balanced reporting can foster trust in the system, while sernsational or biased reporting can undermine confidence.
By setting the agenda, it compels policymakers to prioritize transparency and fairness in tax legislation. Bridge-Building Between Government and Citizens. Media platforms provide an avenue for dialogue, enabling citizens to voice their concerns while also giving policymakers the opportunity to explain their decisions. This fosters a
participatory approach to governance.
The media serves as a watchdog, scrutinizing the implementation of tax policies and holding government officials accountable for any malpractice. While the media holds immense power, it is appreciated that it also faces significant challenges that hinder its ability to effectively promote transparency and accountability.
These include lack of free access to vital information, financial temptation by
policymakers and politicians.
To overcome these challenges, the country must enhance independence of media
houses. Media practitioners must also collaborate with the civil society and the
academic community.
We must also mention that legislators enacting public laws owe their primary responsibility to the people. Their role transcends drafting and passing laws; it involves
a deeper commitment to building public trust and creating a fair and equitable tax
system. Legislators must ensure that the ongoing tax review process involves broader
stakeholder consultations.
From small business owners to large corporations, citizens
must feel represented in the discussions. Public hearings and town hall meetings are
critical tools for gathering feedback and making reforms that resonate with the people.
Legislators should simplify the tax codes, making them user-friendly. They should also
strengthen oversight mechanisms to ensure implementation of the reforms.
Ladies and gentlemen, advancing tax reform requires a synergy of efforts from the
media, legislators, policymakers, and citizens. Legislators must champion reforms that are fair, equitable, and transparent. The media, in turn, must educate, advocate, and hold power to account.
Together, we can build a system where taxation is not seen as a
burden but as an investment in our collective prosperity.
As we leave here today, I urge us all to commit to this shared vision of accountability and transparency. Let us work together to create a system where every citizen contributes to and benefits from our national development.
Thank you for listening.
Professor Ali Ahmad
Speaker of the 8th Kwara State House of Assembly and Professor of Constitutional Law and Legislative Studies.
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