Dear President-Elect Muhammadu Buhari and Vice-President-Elect Yemi Osinbajo,
Congratulations on your election for the presidency and vice-presidency of Nigeria. I thank you very much for your willingness to serve the people of Nigeria.
Please hit the ground running.
The most important policy I encourage you to adopt and implement is income taxation as the pre-eminent tool to fund the budgets at the federal, state, and local government levels from October this year.
By adopting the policy of income taxation as the pre-eminent tool to raise government revenues, you will be extending a practical olive branch to the peoples of the oil-rich Southsouth. They have made an enormous sacrifice for the Nigerian people for many years. They deserve most of the oil revenues to use in compensation for the loss of the livelihood of farmers and fishermen, and for infrastructures, retraining, and environmental cleanup, etc.
Taxation is a shared sacrifice adopted all over the world to raise the revenues governments use to provide services, build infrastructures, fund universities, hospitals, and security agencies.
Nigeria should not be an exception.
With falling oil prices, the state governments are having difficulty in paying salaries of teachers, civil servants, and contractors. The federal government and local governments are also not exempted from the financial crunch.
You need to ask Nigerians worldwide to accept the citizenship responsibility of taxation to meet the budgetary needs of the government and to do social justice to the long suffering peoples of the Southsouth.
You were voted in by millions of Nigerians to institute change in the country, and this is a vital change you should implement that will make a huge and immediate impact in helping the government meet its obligations of paying salaries and contractors’ bills and having extra money for other purposes including education, health, and infrastructures.
I suggest that you institute a progressive income tax structure of 0% to 30% on Nigerians at home and a 3% income tax on Diaspora Nigerians.
If you do, I estimate that the revenues that will accrue to the government from income taxation alone will be around N40 trillion naira, and only about 20% of Nigerians at home and most Diaspora Nigerians will need to be taxed for this purpose.
Other taxes that governments usually collect, such as VAT, customs and excise, etc, will raise the overall revenue figure beyond N40 trillion naira.
In this year, at the prevailing oil prices, it is unlikely that the oil revenues will be more than N8 trillion naira. As you can see, taxation, if implemented, will provide substantial more revenues for distribution among the federal, state, and local governments.
I recommend a 2:1 ratio for the distribution of the oil revenues between the federal government and the oil producing states, with the oil producing states being allocated two-thirds of the oil revenues for their states’ and local governments’ budgets. When a third of the oil revenues that I propose to go to the federal government is added to the revenues from income and sundry taxes, I estimate a jumbo federal revenue of around N48 trillion naira. With this huge revenue, the federal government can support itself, the non-oil producing states, including the new states proposed by the 2014 National Conference, and the provisioning of diverse infrastructures, security, social services, educational services, health services, and social security nationwide. The spending of this large revenue will boost aggregate demand, attract local and foreign investment, improve the business environment, diversify the economy, enable full employment, provide better security support, and improve the quality of the lives of the Nigerian people.
What a remarkable and wonderful change that will be!
Please make a passionate case on the imperative of income taxation to the Nigerian people at home and in the Diaspora. With your credibility with millions of Nigerian people, as the results of the elections show, and with your support among millions of Nigerians in Diaspora, I am confident that you will get a positive response.
You need to do this so that you can deliver on the expectations of Nigerians for a positive change in their lives. The oil revenues are too small to make a decisive difference, and the continued reliance on this resource does not sit well with the peoples of the Southsouth, neither does it do socio-economic justice to them.
Thank you very much for reading. May God bless you, your families, and Nigeria.