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Hypocrisy Of The APC-Led Electric Tax

Understandably, the new All “Progressive” Congress (APC) administration has been diligently focused on raising internally generated revenue across Nigeria, independent of the petroleum industry. Loss of oil revenue has sent the country’s economy on a downward spiral given the the previous administration did not save and failed to establish alternative sources of revenue. While the APC pretends to be a “progressive” party that supports progressive principles like wealth redistribution, especially when there is vast wealth inequality as is the case with Nigeria, their true disposition could not be further from this. As with many things in life, actions speak louder than words.

The APC-led government under President Buhari, through the power ministry led by former Lagos Governor, Babatunde Fashola, has chosen to implement a nation-wide tariff or tax on electricity of 45%. Implementing taxes such as this indiscriminately nationwide, raises the cost of living on everyone, including those who can afford to pay and those who–most certainly–cannot.

It is a prime example of a regressive taxation policy that has a greater impact on the poor and laboring classes than it does on the wealthy. Such massive hikes in basic power costs like this, is so damaging and regressive that it is even a violation of agreed UN global standards, to which Nigeria is party and a signatory. In a rare move, UN observers have publicly voiced concerns over these developments in Nigeria making clear that they are inconsistent with agreed global standards of governance. Needless to say, labour unions across Nigeria have been out in force protesting the developments and calling for the Minister of Power to repeal the power tax increases.

Regressive tax measures like this is certainly not the only means for the government to increase internally generated revenue to finance development. There are many progressive schemes that could have been implemented by now, even when they approved the revised budget measures to rescue cash-strapped states in 2015. I have repeatedly argued for regressive tax measures to target the elite in Nigeria with (Mansion Taxes, Luxury Car/Vehicle Taxes, VAT taxes, Luxury foreign Goods taxes, among other measures). However the administration has not so much as lifted a finger to implement any of these measures despite the fact that Nigeria is among the most unequal nations in the world in terms of wealth inequality. In fact the administration’s budget and planning minister indicated that there would be no major increase in taxes this year in Nigeria, at least not on the elite.

With all things being considered, why is the (APC) All “Progressive” Congress pushing such a regressive policy while shunning progressive measures? The answer is simple, the APC is not a progressive party at all. In fact just like the PDP they are equally as elitist, class insensitive, and completely aloof to the hardship that the masses in Nigeria face from the top down. Using the word progressive in their name is a charade. As unfortunate as it may be, the enemy of your enemy, is not necessarily your friend. Today, Nigerians are learning this lesson the hard way.

Nigeria does need to increase tariffs and raise money, but not on basic electricity for everyone, but on foreign wine and champagne that the elite across Nigeria consume. On the foreign films and satellite that the elite across Nigeria watch. On the business-class flights and private jets that the elite across Nigeria hire. Taxes need also to be collected on the fleets of luxury cars that elite in Nigeria currently own, and on their aquatic yachts also. Luxury property taxes should also be collected on the multiple mansions and luxury flats that elite across Nigeria own, especially if they also own property abroad. This is not radical or revolutionary, it is simple common sense in a society plagued with massive wealth inequality like Nigeria. These same policies exist in the US and the UK.

The only hope now left for Nigerians to see these changes implemented is through massive nationwide protests led by organized labour. The elite-servicing hypocrites of the APC that were swept to power almost a year ago have no intention whatsoever of doing the right thing by making progressive changes in Nigeria, if they did, they would have done it by now. Instead after sweeping to power with a charade of mischaracterizations, they continue the policy of robbing poor masses of Nigeria blind, the same people they swore to serve.

Kuranga and Associates Limited is an investment management advisory firm and an asset manager with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net . © Copyright 2015 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Articles by David O. Kuranga, Ph.D.