An Open Letter To President Goodluck Jonathan

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Dear President Goodluck Jonathan,

Please send a bill to the National Assembly to make income tax the principal tool for government funding in Nigeria starting from October 2015. This is the case in all advanced nations of the world.

There are many reasons why you should do this:
1. The burden carried by the minorities in the oil producing states will be lifted. They will be able to afford monthly payments to farmers and fishermen whose livelihood has been destroyed by oil pollution.

2. The oil producing communities will have funds to use to clean up their environment and build the infrastructures that will promote their socio-economic well-being.

3. Nigerians, as you are well aware, are vociferous critics of governments that they do not support with their income taxes. Taxation will provide them the opportunity to make the financial sacrifice needed for the development of the nation.

4. Taxation is an investment. Taxation will motivate Nigerians to be proactive, rather than reactive, to conditions they do not like in the country as they will regard the income taxes they pay as their investment for outcomes they want.

5. Taxation will make Nigerians to exert pressure on their local government officials and state governors who are closest to them for performance in the provisioning of services they need.

6. Taxation will remove the federal government as the cover for the incompetence or corruption of any governor or local government chairman.

7. Taxation will promote fiscal federalism as some states can raise enough revenues and be self-reliant, but some states will continue to need federal support.

8. Taxation will promote national unity as tax payers will become better appreciated in states of residence that are different from their states of origin.

9. Taxation will promote the importance of education nationwide for skill building and knowledge acquisition needed to attract of local and international companies.

10. Taxation will solve Nigeria's budget crunch as it will provide an order of magnitude more revenue, a windfall, than oil revenues alone. These revenues can be used by the federal, state, and local governments for wealth redistribution, provisioning of security, infrastructures, and services to the Nigerian people as is the practice all over the world.

11. Taxation and the judicious employment of the accrued revenues to the governments in the country will create a greater aggregate demand in the nation. With money in the hands of millions of consumers, commercial firms, entrepreneurs, investors, builders, manufacturers, retailers, wholesalers, importers, and exporters will be attracted to Nigeria.

I propose a variable income tax in 5 tax brackets based on total annual income of people resident in Nigeria to fund the federal/state/ local government budgets respectively. I also propose a sixth bracket for Diaspora Nigerians:

A. 15/15/15 per cent tax bracket for people whose total annual incomes are above N36 million naira.

B. 8/8/8 per cent tax bracket for people whose total annual incomes are greater than N24 million but less than N36 million naira.

C. 5/5/5 per cent tax bracket for total incomes greater than N12 million but less than N24 million naira.

D. 3/3/3 per cent tax bracket for people whose total annual incomes are greater than N6 million naira but less than N12 million naira.

E. 2/2/2 tax bracket for people whose total incomes are between N500,000 naira but less than N6 million naira.

F. Diaspora Nigerians who already pay hefty taxes of 25% to 35% in their host countries will pay a 1/1/1 per cent of their total incomes to the federal, state, and local governments respectively.

Low income Nigerians whose annual incomes are less than the equivalent of N500,000 naira will pay no taxes.

As the National Bureau of Statistics may confirm, there are many naira multi-millionaires, naira billionaires, and naira trillionaires in Nigeria who currently make no contribution to the federal budget. Please give them the opportunity to give back to society some of the funds they spend or ship overseas.

In 2014, the budget of the federal budget was N4.9 trillion naira and the combined budgets of all the states and local governments was less than this. If through taxation, the federal, states and local governments can each raise up to N15 trillion or a total of up to N45 trillion naira for the three tiers of government, why will you not use this fiscal tool that all developed nations leverage to provide for the socio-economic and security needs of their peoples'?

I wish you well. May God bless you, Nigeria, and Nigerians.

Abitunde Taiwo

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Articles by Abitunde Taiwo