In Enugu State, there is a raging controversy over the rationality of Governor Ifeanyi Ugwuanyi’s current tax policy. Associate Editor, Sam Egburonu, reports on the disagreement and its effect on the politics of the South-East state
Enugu State Governor, Ifeanyi Ugwuanyi’s vision of rapid economic revival of the state seems intricately linked to a successful evolution of an effective taxation regime that will help his government to raise the state’s Internally Generated Revenue (IGR).
Ironically, it is this belief and his personal resolve to ensure adequate taxation of the people that have attracted the attention of the major critics of his government. But it seems the governor is not deterred, thus creating a situation where his government and his style of governance are today widely assessed by the divided opinion of his supporters and critics on the issue of increased taxation.
While his critics lament his alleged resolve to make life more difficult for the common people of Enugu State by imposing taxes on them, his supporters said taxation is the right way to go, given the global economic down-turn, the state’s meagre resources and the need to sustain development and growth.
As soon as he was sworn-in as governor, Ugwuanyi did not keep any one waiting before he declared his government’s interest in taxation. In his inaugural address he had warned the citizens and corporate entities against tax evasion, declaring pointedly that the act will no longer be tolerated. He said tax defaulters would not be counted as friends and partners in the development of the state and then assured that every money paid as tax to the government would be properly utilised.
“I will therefore be calling on Ndi Enugu to tighten their belts because under this administration, we will start with government functionaries and business. We will lead by example, to free up resources and channel it to real developmental issues. In addition, every revenue-generating agency of the state should be ready to generate and remit revenues to fund government development efforts. Likewise, individuals and cooperate entities should henceforth start paying tax as defaulters will no longer be counted as friends to the state. But one thing I assure you all, that every Kobo put into the pockets of the government will be utilised transparently in a manner that has value to your life,” he said.
Ever since then, there has been divided opinion over the rationality of the Ugwuanyi-led state government to introduce what some described as a ‘regime of excessive taxation. The criticism peaked after Ugwuanyi presented 2016 budget proposal, tagged “Budget of Stability and Consolidation,” to the Enugu State House of Assembly.
Reacting to the details of the budget, All Progressives Congress (APC), Enugu State Chapter, had, in a statement, titled “APC urges Governor Ugwuanyi to recover stolen funds,” signed by Mrs. Kate Offor, its Publicity Secretary, described the proposal as “prone to excessive taxation.” The opposition party advised the governor to consider the option of recovering funds stolen under the administration of his predecessor, Sullivan Chime instead of imposing taxes on the people.
Reacting to the comment, the Chief Press Secretary to Governor Ugwuanyi, Mr. Uwakwe Abugu, said, “APC has stunned critical observers of the ailing economy of the nation by condemning plans by Enugu State Government to shore up its revenue base in the 2016 fiscal year by generating funds through taxation.
“Either inadvertently or merely displaying seeming ignorance of the economic mood of the nation, the state chapter of APC is busy attacking Ugwuanyi for proposing to raise more funds from taxation in the 2016 Appropriation Bill presented to the state House of Assembly, while the Minister of National Planning, Udo Udoma, was explaining to Nigerians how the Federal Government, formed by the APC, will, within the same fiscal year of 2016, raise trillions of Naira from taxes as one measure to cushion the effects of the crashing oil prices on the nation’s economy almost solely powered by oil revenue.”
Abugu also flayed APC for allegedly trying to dictate to Ugwuanyi on how to run his government. “Whereas the governor and his team have long since swung into action to dramatically raise the government’s internally-generated revenue through various sources, including taxes, the opposition party wants him to abandon this noble course of action and rather pursue only actions for the recovery of funds allegedly stolen by the past administration in the state,” he said.
Between history and politics
Aside political considerations, which seem to have dictated the polarization, some respondents suggest that the current disagreements over the need to emphasize taxation as a means of increasing Enugu State’s economic base, is rooted in the history of the people, as some of the people, over the years, have considered taxation as a tool of oppression and colonization.
According to Dr. Godwin Uzoka, a retired economist now living in Uwani, Enugu, “Ugwuanyi’s policy is receiving the kind of criticism it is receiving today not because our people are ignorant of the need for taxation but because of our long history of hatred of taxation. Even during colonial government, our fathers and mothers protested attempts to impose taxation on them. In the whole of Igboland, especially in Enugu and Nsukka areas, this protest against taxation was very prominent as captured in classics like Things Fall Apart and Arrow of God, by Chinua Achebe set in our communities. This reality was not helped by the long history of corruption and embezzlement of public funds since independence, which understandable resulted in total lack of trust on the willingness of public officials to utilize proceeds of taxation in development. This is why people see taxation as a wicked act against them. So, until Ugwuanyi convinces our people that there would be strict accountability and proper utilization, this policy will continue to attract criticism.”
As at today, the controversy has not only caused a sharp division between those who support the governor and those who oppose him but has also emerged a major tonic of Enugu State’s politics.
