Political economist and founder of the Centre of Values in Leadership, Prof. Pat Utomi, has described agitations over the tax reform bills as misplaced, arguing that the focus should be on how taxes stimulate production.
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Speaking with Sunday with Punch News, Utomi observed that the conversation on the tax reform bills had been on equity in collecting and sharing revenues in an economy that was not producing.
Drawing from history, he said reforms that allowed the increased flow of revenues to certain Nigerian groups rarely improved the lives or welfare of the average person. Still, he deepened corruption and desperation for political power.
Rather than “tax to kill to get money from Nigerians,” Utomi advocated for the specific use of taxation and tax reform, which would be supply-side economics-driven, thereby boosting production.
He explained that specific use taxation where tax on specific purchases was known to be directed to particular purposes, adding that those who made such contributions had to monitor the use of tax.
“Specific use tax is where the tax goes to a specific use and the users must monitor the use of that tax. For example, in the US, there is a gasoline tax, that is tax paid on petrol. Every litre of petrol you buy has a tax. That tax is dedicated to highway maintenance. It goes directly to a highway maintenance fund.
“I think we need to begin to ask ourselves what are the optimal points in taxation in our country, and careful about the other functions of social taxes, which we have, because we don’t have social safety nets in government.
“Our taxes should be incentives for moving away from consumption to production that will diversify the base and grow it. I think we should begin to focus more on retreating production. How do taxes stimulate production? The supply side needs to be king,” Utomi added.
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