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| Isaac Wadak |
FG is taxing poverty in a depressed economy. Full version of an exclusive interview with
the Chairman, CITN Jos District & Society, Isaac Wadak.
Isaac Wadak, a retired Permanent
Secretary, a Politician and tax consultant is currently the Chairman of the
Chartered Institute of Taxation of Nigeria (CITN), Jos District and Society. In
this exclusive interview with African Drum, he bares his mind on the recent
increase Value Added Tax from 5 percent to 7 percent. He says tax remains the
pillar for development for any serious economy because it' s timeless unlike
other sources of income (Oil inclusive) which have life span and therefore,
have terminal point. Wadak also calls on Public office holders to shun
profligacy and ensure judicious use of public funds to encourage payment of
taxes. Enjoy the excerpts.
Congratulations once more on your
election as Chairman, Charted Institute of Taxation of Nigeria, Jos District
and Society.
Thank you.
Sir, the Federal Government recently announced
an increase in the Value Added Tax from 5 percent to 7 percent. Is this a good
or bad omen for the Country?
First of all, it's
important I clear the air by saying that the implementation of the proposed
increase in VAT has not started. It is still at the proposed stage. If you
listened carefully, the Hon. Minister, during the pronouncement said there was
going to be wide consultations between then and December 2019. All things being
equal, the actual time for the implementation would be January 2020. VAT is a
law, so the necessary procedures and amendment in terms of legislation has to
be done so as to effect implementation.
My take is that it is a welcome development because we have been
applying the 5 percent for more than 20 years. So, it's a welcome development
and I also believe it's good for the economy.
There is also this argument by pundits that in the whole of
Africa, our rate is the lowest, but I have my personal thoughts regarding that
line of argument.
How true is the Government's
position that VAT is applicable or charged only on luxury items and services
and therefore, does not in anyway affects the common man?
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| Wadak |
That is true only to the
extend of the statement. It is true that if you don't consume luxury items you
don't have to pay the tax but if you take into cognizance the multiplier
effect, you would realize that it affects the common man indirectly because the
luxury items and services are mostly consumed by political appointees and
public servants and the bills settled are not from their personal funds but
from public treasury which is a pool of tax payers. Ask yourself, who are the consumers
of luxury services in expensive hotels and other places? It's the political
appointees and other public officers. Take for instance, a political appointee
stays the night in an expensive hotel and the next day he is given a bill of N500,000.
Does he pay the bill from his personal income? No. The bill is settled from the
tax payers’ money. The tax paid by the common man. So, this area of profligacy
by public officers and other political appointees is our major area of concern.
The way out is for Government appointees to understand that they need to cut
down on their consumption of luxury items and services. Also, Government needs
to explain to the people of Nigeria what they intend to do for them with what
would be realized from the 7 percent increase and must keep to their promise so
that the people would have trust and confidence in the Government and gladly
pay their taxes.
Has your institute forwarded this
advice to the Government?
Yes, we have spoken quite a lot on this. Also, what we keep
telling government is that it's not all about over taxing the people but
expanding the tax base by bringing more people into the tax net which is far
better than increase of tax. By bringing more people into the tax net, that
would yield more revenue. For couple of months, we have noticed different types
of tax policies playing out and I feel it's not too good for an economy that is
just coming out of recession. I have often used the phrase ' Government would
just tax poverty' and somebody once told me, oh, that's a good expression and
it's the truth. We don't produce, we only consume yet the government is busy
taxing people. You are a journalist and you must have been following events
relating to Taxes of recent. There has been the issue of increase in bank
charges on both deposits and withdrawals; there is the issue of Police Trust
Fund and there is also the issue of Communication tax. And all these came
simultaneously during a period of recession, (though some people are saying we
are recovering). That's okay. Let us recover fully first; let the economy grow
thereafter, the government can begin to tax. But for now, honestly speaking, I
believe we are just taxing poverty.
Recently, the President of CITN,
Dame Gladys Olajumoke Simplice was in Jos and harped on the need for organisations to engage
only your members as tax consultants, could you shed more light on this?
Yes, the call is timely because from the findings of the
institute, there are so many quakes parading themselves as professionals. So,
there is the need sanitize the system. Consequently, it is a call to standardised
and professionalised. We in the Jos District have been working hard to engaged
stakeholders with a view to finding a lasting solution to the issue. You see,
this tax thing stands on three legs. One leg is the tax administration ( that
is the Board of Internal Revenue), the second leg are the Practitioners (
Professional) and the third leg are the Tax Payers. So, we sit on that tripod.
We in the CITN have been engaging stakeholders. For the professionals, they
have formed what is called ' Jos Tax Practitioners Forum' and the main
objective of the forum is to ensure professionalism in the practice of taxation
as enshrined in the Charter of the CITN.
Apart from the issue of quackery,
what other challenge the Jos District has experienced?
The challenge of membership
drive. The Jos District is a new Society and has been working hard to get more
members. We have been encouraging people especially accountants who are not
members of CITN to join. We have also been talking to ICAN and ANAN and happy
to say that CITN and ANAN have an MoU to the effect that if a person has ANAN
certificate can gain direct entry to CITN. As a matter of fact, you can even
apply for practitioner license and you will be issued with same. The only thing
that must be done before issuing the license is the induction course. So, we
are leveraging on that MoU. We have also set up education committee that is
setting up study and examination centres. When that finally takes off, we would
have many students sitting for the professional examination. Let me tell you,
tax is the present and future of this country. Oil has its lifespan but not so
with tax. It is for this reason that our colleagues in accounting and other
related profession have been trying to ensure that they switch and specialized
in taxation because they understand taxation is the future of this country. Of
course, many of them have been in the practice of taxation but CITN is saying
that was in the past. Now that we have a Charter, if you want to practice, you
need to get a license. And I must tell you that as it is at the moment, most of
them are in the process of registering with CITN so they can get their license.
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| Isaac Wadak |
Sir, your advice to all regarding
tax and taxation?
You see, I have always said there are three things that are
inevitable to a human being and they are; birth, tax and dead. Whether you like
or not, you must be born before you exist; whether you like it or not, you must
pay tax in one way or the other and whether you like it or not, one day, you
will die. Take note of this. As a journalist, as soon as
you leave here and before getting to your destination irrespective of how you
chose your movement, you must pay one form of tax in one way or the other. So,
tax is a permanent thing in life. You can't escape it. My advice therefore is
that people and organizations must begin to engage professionals on tax matters
because you would always have one or two problems with RTAs (Relevant Tax
Authorities). That's why you need a consultant at all time to help in mediating
between the tax payer and the RTA. You would always need a tax consultant
because people on their own, would not even understand the technicality and
jargons involved
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