December 5, 2021

NEWS AGENCY OF NIGERIA

Africa's Media Giant

Adoption of progressive tax regime will tackle inequality, poverty-CSOs

Adoption of progressive tax regime will tackle inequality, poverty-CSOs

Adoption of progressive tax regime will tackle inequality, poverty-CSOs

According to Otive, Oxfam and Development Finance International (DFI) report “The West Africa Inequality Crisis: Fighting Austerity and the Pandemic” revealed that the pandemic and poor policy responses worsened inequality and poverty crisis in West Africa.

By Angela Atabo

A coalition of more than 17 Civil Society Organisations (CSOs) have called for the adoption of progressive taxation regime to curb inequality, poverty, and food insecurity in the country.

The CSOs at a two-day National Tax Summit Organised by the Tax Justice and Governance Platform (TJGP) on Thursday, in Abuja said that the call became imperative because retrogressive tax system was creating poverty and inequality in wealth.

The News Agency of Nigeria (NAN) reports that progressive taxation means higher tax rates for those with higher income or more wealth, so that those who earn or have more are taxed at a higher rate.

Dr Otive Igbuzor, Founding Executive, African Centre for Leadership Strategy and Development (Centre LSD) in his key note address on the West Africa inequality crisis said inequality was one of the greatest challenges facing mankind.

According to Otive, Oxfam and Development Finance International (DFI) report “The West Africa Inequality Crisis: Fighting Austerity and the Pandemic” revealed that the pandemic and poor policy responses worsened inequality and poverty crisis in West Africa.

He said that the Oxfam report on inequality in Nigeria documented that the main drivers of inequality were retrogressive taxation; poor budgeting system and allocation among others.

“The report also prescribed policy solutions which included pro-poor laws and policies; progressive taxation; combating corruption; addressing political elite capture; supporting small scale farmers and promoting and encouraging active citizenship.

“These diagnostics and policy prescriptions are still valid.

“Oxfam studies have documented that there are three proven areas to reduce inequality significantly:one, public services, looking at education, health and social protection.

“Secondly, taxation, looking at how progressive structures are on paper and in practice and thirdly, worker’s rights with a particular focus on women’s rights,’’ he said.

Otive said that similarly, development theorists and practitioners agreed that to improve the quality of life of citizens require focus on four areas of infrastructure, agriculture, education and health.

He said that the report also prescribed policy solutions which included pro-poor laws and policies; progressive taxation; combating corruption; addressing political elite capture; supporting small scale farmers and promoting and encouraging active citizenship.

“These diagnostics and policy prescriptions are still valid, ’he said

Mr Victor Arokoyo, Senior Programme Coordinator, Christian Aid, said the summit was organised because CSOs were concerned about fiscal responsibility of government and how to generate more revenue for sustainable development.

Arokoyo said that there was need for equitable and fair tax system so CSOs were interested in how the government utilised resources they get from tax and ensuring that there should be accountability in how they collect tax.

He said that CSOs were also interested in pushing the campaign beyond just encouraging people to pay tax to insisting on fair and equitable taxation system.

`Today we are looking at the report of inequality wealth in West Africa, what are the factors that push people into poverty? Again taxation is one of them.

“If we keep on using regressive tax, you are likely going to push more people into poverty, so we are for progressive taxation,we want people to be taxed according to their wealth.

“We want people that are rich to pay more not the poor paying more than rich people,’’he said
Mr Kenneth Okoineme, from Action Aid, said that it was a known fact that the nation was struggling with resource mobilisation to fund development.

Okoineme, therefore, said that the summit was geared towards looking at the alternatives paths that the government could take to guarantee sustainable financing for development.

According to him, the CSOs think that these pathways exist and can be achieved foremost through fair and progressive taxation.

“So, government needs to take action around the unwarranted granting of tax incentives, we are all witnesses to the Pandora papers which is an indication that tax avoidance and tax evasion is still happening.

“Therefore, we are hoping that the government can begin to look at these issues critically and see how it can strengthen the tax architecture to mobilise the needed resources,’’ he said.

Okoineme said that government in its 2022 budget projection talked about improving the revenue to GDP of the government from the present eight per cent that it is to around 15 per cent by 2025.

He said if that was the aspiration of the government then it should take the necessary steps to achieve it and not just pay lip service.

Mr Henry Ushie , Oxfam International Nigeria Campaign lead on inequality, said that the organisation believed that the issue of poverty was rooted in inequality such that if Nigeria was able to stop all the issues of inequality and end all its drivers poverty would be reduced.

“So, we focus on investment in key sectors that would help to reduce poverty in all its dimensions.”
According to Ushie, when government make commitments towards these various sectors, it actually shows that they are committed towards reducing poverty in all its dimension particularly on food security.(NAN)