TAX reforms based on truth devoid of sentiments ‘ll be profitable to all –Sen. Oshiomhole
Well, thank you very much. I think, for me it is unfortunate like you said that anything, any proposal on any matter that comes before the National Assembly can possibly be seen as one that is divisive depending on where your accident of birthplace is, you are either for or against.
I think the real beauty of democracy it gives room for participation across the board. And the only way I can justify my coming to the Senate is that I have lived through an era in which a man in the name of federal government will write something like the federal military government hereby decree as follow and signed and that’s a law.
You can’t question, you can’t add, you can’t subtract. And I think for those who were involved including my humble self in fighting against military dictatorship, it was precisely because it’s a government of exclusion. You don’t have opportunity to influence law making.
You can wake up in the morning and find out what was lawful last night is no longer lawful. And they can even backdate the law to criminalize what was lawful yesterday and criminalize it by tomorrow.
So, I mean at the heart of democracy, for me is that so much power has been concentrated on the president but deny him one power.
That is the power to make laws but like any Nigerian, he has the right to initiate a bill and subject to the National Assembly to look at it, make amend and do with it whatever it wants.
And I thought we have opportunity for the first time really, if you ask me, because the only thing that is constant in modern society is change and how do you adapt to change? As a society, change could either by revolution or by reform.
The beauty of reform is that it is a product of robust discussions, through debates from consensus building from negotiations.
That is what the parliament is all about.
The good thing is that the president has just sent to us a bill. What he has sent to us is a set of proposals for a bill for us to look at.
It is incumbent on the National Assembly to discuss, debate even negotiate and alter it as we want in a way that it will reflect the collective decision of the two houses.
I will be surprised if the president thinks that whatever he forwarded to the National Assembly will return to it the way he proposed it…
So, for me, if you ask me, what do I think? It is not as if I had a benefit of a personal conversation with anyone but flipping through the bill, l believe it is the kind of thing the business’ people want, for example, it seeks to reduce corporate tax.
I will personally want to increase corporate tax … I’m talking as a labour man. And one of the things they consider in industrial location in terms of foreign investment is: What is the tax regime in that country?
I am curious given the level of opposition to the bills from your colleagues from the Northern part of the country. But as a former governor, I think before you sent a bill of this nature to the State Assembly, you would have interacted with lawmakers making them to know the intension of such bills. What is your comment on this?
I do not think it would be fair to talk in regional term on issue of national importance. And I’m afraid you are able to pursue a conversation along regional lines because I am an unrepentant Nigerian, and I do not want to look at things from regional point of view.
I have often added, there is nothing that is good for one part that is bad for the other. And there is nothing that is bad for one part that is good for the other. As president of Nigeria Labour Congress, I represented all the working people across North, South, East, West and regardless of people’s faith.
There’s no federal character in hunger like there is no federal character in prosperity. if you’re looking at the prosperous Nigerians, you will find them across the six geopolitical zones.
So, you did not align with the Southern caucus that came out with a statement? The southern caucus led by Senator Seriake Dickson who came out to say they are endorsing the tax reform bills.
Excuse me. You want to push me… The point I’m making is that Senator Seriake Dickson made his point eloquently clear, and I called him after that debate. I think you also had a conversation with him on your programme here. I don’t think the essence of his position is informed by the fact he is from the south. No. I think it goes beyond that.
Constitutionally speaking, we always claimed that we are operating a presidential system of government.
Under this arrangement the residual power resides with the state while the federal government possesses the exclusive power. It is a general belief that the central wields enormous power.
And there are a lot of people who want us to whittle down the power of the federal at the national so that we can make federating units more powerful. Some of the states don’t have the power to collect the VAT.
Let the collection be in one place and let the states distribute. The issue of derivation and distribution have generated a lot of fuss. What do you make of all these together? What do you think will work perfectly for our federal state?
There is nothing that is perfect. What we can achieve as humans in a democracy, is that we can do better in every aspect of life. The fact that we are doing well, and we say well done doesn’t mean that by tomorrow, we cannot do better today.
We often talk about America as if it is a perfect federal system. One of the legacies of former President Barrack Obama was that he was able to put in place what they called ‘’ affordable healthcare policy’’ which several democratic governments were not able to do. That was a federal government system that Nigeria likes to copy yet a federal government put in place a tax that oblige every American to benefit from affordable healthcare.
Some people called it ‘Obamacare’. I think in that manner they helped to immortalize his name. That you are in a federal system doesn’t mean you are in 36 autonomous states.
It doesn’t exist like that. You could find that even the recent debate in America and at the heart of that debate some will say… the democrats were accusing the Republicans of wanting to grab more tax relief.
And transferring more heavy tax burden to the working class. The democrats say we are elected, and we will reduce the tax burden on working families.
And put heavy burden on the rich is perfectly legitimate. It is a federal system.
I have stayed in a hotel in the US not once or twice. And I found out upon checking out in my bill you have federal tax, state tax and even community/ county tax.
That is three. Just because I slept in a room. And each of these authority collects its own taxes. When you say, who should collect? Should that really be an issue? That should be a matter for who can do it more efficiently. There are benefits of economic of scale. There could also be dis-economic of scale. Small can be beautiful, it can also carry excessive overhead. And the issue of transparency would set in.
For me, l understand where I am coming from. As I am here, I have not reached a decision. That this must be done. I have recognized that I am not in a position to make a decision. I can only contribute to the process of distributing to decision making by engaging my colleagues on this issue.
For example, when the matter comes before public hearing, what I intend to do is to see how we can jerk up the base from 70,000 a month to a 100,000 or even to 200,000. This is a legitimate thing for me to do. But whether I have the buy-in of my colleagues will require that I negotiate, explain and persuade and they are convinced.
About if they are not persuaded, then the figure will remain what it is.
It will be strange for democracy if we all have accepted whatever bill the executive brings to the national assembly and the assembly stamps it and returns it exactly the way they brought it.
As a former Governor of Edo state, I don’t remember any legislation particularly on appropriation that I sent to the State House of Assembly that they returned to me exactly the way I sent it.
They will have far more reason to add or delete something or to modify something. And I have to ask myself, if I refused to sign it to law, and they have two third majority, to veto what I am proposing.
***But what I found that, when debates assume ethnic and religious dimension, the first casualty is truth and sound reasoning. You are going to find so many people on a good day, a perfect gentleman generating so much heat and, in the process, giving us very little light.
I like to say to everyone that the real beauty of democracy is that there is no living Nigerian now, who can say I hereby decree as follows. But the President has a duty to initiate a bill, and he made the point that Nigeria needs to go through a reform including the tax system.
There are a lot of things when you see when you travel out of your state. If you go from here to my state, you only pass through Kogi state. You could find two to three check points of people collecting some taxes whether for produce or whatever it is.
By the time you cross to Edo state, you see some other boys who say they are also collecting taxes. They wear uniforms and you are not so sure which is genuine.
Nobody can argue that we should not reform several aspects of our lives. In the heart of many is revolution. But on our lips is reform.
That was what an American told me for once. The first time I visited New York, and I saw a lot of people. And by the time I read the literature saying about 25 years ago, about 50,000 Americans were sleeping in front of public buildings at night. I saw some eating from the dustbin. And for this kind of people, there reform requires more than a token reform. So, I feel society is not stagnant. And this confirm to me that we live in a world that is not just stagnant but is subject to change. The spade of change is so fast. That only those who are capable of reforming not deforming anyway will survive. My point is that let us keep the debate going. Let us invite those who thing they have greater insights to speak to us on aspects that we are not clear about.
So, you support the fact that the bill should be worked on?
We are governed by the constitution. There is nothing in the Nigerian constitution and the rules of the Senate for example that say throw away any bill that you don’t like. What the law says is that if you throw away a bill, and it didn’t go through second reading you cannot revisit it for one year.
Or for the life of this Senate. So, what I found since I came in and I understand that is the tradition, is that depending on the nature of the issue; you do a first reading without much ado.
But by the second reading the senators will debate it from different angles including bills proposed by my colleagues. I have spoken against a number. It is such that I am always against certain bills that carry certain tendency particularly if you are trying to establish a new institution that needs review especially the ones that need our current expenditure.
Do you posit that the President should stay on it? What is your position?
I think our procedure is that you do first reading, without much debate. For the second reading, you debate and depending on the nature of the issue a committee is asked to organise a public hearing to let the members of the public raise any concern. At this stage, we can add or subtract.
That is the way it works. Sometimes you are given four weeks within which to get that done.
But in the case of this reform, I think the entire Senate realizing the important issues raised in the reform bills directed the relevant committees two to three of them to organize public hearing on it. And they have all the time in the world to do just that.
And I think anyone will do because I don’t think there is any Senator who doesn’t come from a state. Don’t forget that the Senate is guided by its own rules.
So, that is the procedure. And if you withdraw it, you have closed the debate. It is better debated at public hearing. We are making these laws for the Nigerian people. Sooner or later, everybody will become former.
What will become of the Nigerian people? The Nigerian people who should look at this thing constructively say is it in our interest? But in the real word, you will get or know what you want. And you get what you are able to negotiate. In a democracy. I think that some discussions are going on and I will expect more of it to go on. And in the end, we will find a middle ground.
But remember I said something at the beginning. That nobody can say I hereby decree as follows. And I think at the end of the day if these issues raised are around what we are able to build a consensus, then we will forward the bills to the President for his assent. And if he is not satisfied, under the rules in the constitution, he has the right to veto it and ask us to look at it again. And along the line we will find a consensus.
When I was the governor of Edo state, I introduced tax reforms too. And people say ‘you are going to destroy your goodwill’. And I said the goodwill I enjoy now is based on expectations. That I will do the best based on my reputation as labour leader. But if I do not raise taxes, and all I am able to do is that I pay salaries, even that could come under threat.
As they say, a statesman looks at the next generation while a petty man minded politician looks at the next election.
People will say why don’t you wait, it is going to create so many enemies. Only time will tell. I believed that you make reform in a manner that the benefits of those reforms, will begin to see them before the end of your tenure. It bothers on opportunism in my opinion to wait when you are about leaving and trying to introduce some measures because you are not going to be around. I think this reform by the President represents a bold attempt to say we cannot continue with business as usual.
So, let us look at these taxes again. Because ideally, we ought to be living and run government based on taxes. And not cheap money from oil. When I was growing up. You don’t talk in the village square where elders are holding meetings if you have not paid your taxes.
But the military came and said they have abolished those kinds of taxations etc. Today, those who are paying taxes are very few. What people also didn’t take note of is that this taxi bills seek to reduce the tax burden on those who are earning up to 50 million a year or month. They pegged it at 25%.
And it seeks to remove taxes on small scale businesses. So that the environment can be more business friendly having recognized that a lot of people in the informal sector of the economy is driven increasingly by large scale businesses.
So, you do well to remove their tax burden using this tax bill as it is being proposed, I think the people will be quite happy. When you reduce this debate to the level of between them and us, this opportunities are lost. And I think in the interest of public hearing and debate, identify those noncontroversial issues and mark them, and deal with them.
Do you think it will be fair to say some of these decisions are made in the best interest of Nigerians?
My hope is that the President honest intention to change something in some fundamental ways, such that in the end, will pay off and people will begin to reap those benefits. So that those who cry in the morning will have to find themselves smiling in the evening. I don’t think there is any leader that comes out to punish the people.
And it will require that we have a leader with the level of courage to take some difficult decisions though inevitable. Tell me, someone who must enjoy some omelettes without broken some eggs.
For how long will it be?
As long as it takes. I don’t hide this fight because I am concerned. I think there are even couple of more things this President should do. If we are going to create jobs, and we have more jobs. If the manufacturing sector not just services. Will require even more fundamental decisions to be taken. I want to see the prohibition of some vehicles. I know one thing.
Nigeria cannot continue the way we are going. I have my issue with the exchange rate. I celebrate the fact that nobody can celebrate as a billionaire because you are friend of the CBN Governor. You buy the dollar at N300 in the morning then sell for N500 in the evening. And people becoming billionaire without any effort
