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Last Updated: Monday, 6 June 2005, 15:58 GMT 16:58 UK
Are Nigerians ready to pay tax?
BBC journalist Osasu Obayiuwana has returned home to Nigeria for the first time in two years.

In the second of a series of articles on how he finds Africa's most populous nation, he looks at what it will take for Nigerians to agree to pay their taxes.

Kyari Bukar
Kyari Bukar has gone back home but wonders what his taxes are being spent on

One of the biggest problems facing Nigeria's government is to persuade more people to pay their taxes in a country where millions of dollars of public money has been stolen by corrupt public officials.

A closely related goal is to convince the cream of Nigeria's intellectual elite to return home from Europe and North America and help rebuild what could be one of the world's biggest economies.

Kyari Bukar is one of those who answered the clarion call to return to his motherland and contribute to its development.

Leaving a cushy job with computer firm Hewlett Packard in the United States, where he lived for nearly 20 years, Mr Bukar made the decision to return to Nigeria in 2001.

Now the CEO of ValuCard, the first electronic cash card payment system set up in Nigeria, Mr Bukar insists he has no regrets about leaving his home in the US state of Oregon for the hustle and bustle of Lagos life.

But he admits that readjusting to life in the sprawling city of 12 million people, as well as the lack of functioning public utilities, has put him on edge a few times.

"The lack of infrastructure, such as power and water, has been a bit frustrating and one begins to wonder why people have to pay taxes," he asks.


"When you consider the fact that people with means end up buying their own water, getting generators to guarantee constant electricity, not to mention educating their children privately, is there a rationale for paying tax?"

With the exception of those who work for the government and blue chip companies - where tax is deducted at source - it has been a mission impossible to convince people to make honest tax returns.

Ifueko Omoigui, chairman of the Federal Inland Revenue Service
If the hard-earned money they pay to the government's coffers is being stolen or misused, they will do everything to evade tax
Ifueko Omoigui
Federal Inland Revenue Service
Most understate their turnover in order to pay the barest minimum that would be accepted by the authorities.

"John," an old university classmate of mine, now in private law practice, freely admitted to me that he is one of those who fiddle their figures.

But he put up a defence that will be supported by many Nigerians disenchanted with the government.

"When you pay tax, there is a presumption that it will be used by government to provide the basic infrastructure that is needed for any society to function effectively.

"But the reality is that they are not doing this and they have squandered the revenue from oil that could have made life comfortable for us here.

"So why should we hand over our hard-earned money to people we believe will put the money in their own pockets?" he asked.

Pay cut

Ifueko Omoigui, chairman of the Federal Inland Revenue Service (FIRS), which is charged with enforcing Nigeria's tax regulations, understands the rationale for his position - but only up to a point.

"I can understand why people are averse to paying tax but two wrongs do not make a right," she tells the BBC at her Abuja home.

Cattle cross street in Kano
Many Nigerians are too poor to pay tax
"The payment of tax is a civic duty that we must all meet, as long as we live in this society," Ms Omoigui insists.

The 43-year-old, educated at the University of Lagos and Imperial College, University of London, is the youngest person to be appointed to the FIRS post and took a severe drop in salary to serve her country.

A distinguished 12-year career with Arthur Andersen, as well as eight years establishing Restral, her own start-up consultancy, caught the attention of Finance Minister Ngozi Okonjo-Iweala, who recommended her appointment to President Olusegun Obasanjo.

Ms Omoigui, who began work in May 2004, is well aware that changing the sneering and cynical public attitudes to the payment of tax is the biggest hurdle she and her colleagues at the FIRS face in the quest to forge a new culture.

She is trying to draft Nigeria's first ever national tax policy.

Tax education

With the errant mindset of older Nigerians near impossible to change on this subject, inculcating a new mentality in the next generation of taxpayers may be the long-term solution for an endemic problem.

"We are planning to liaise with the ministry of education to inculcate the need to pay tax in our young people," she says.

"But I accept that the government also needs to win the trust and confidence of the people if we are to get them to pay taxes.

"If the hard-earned money they pay to the government's coffers is being stolen or misused, they will do everything to evade tax," she accepts.


But she is also willing to get tough.

"We will also work with the Economic and Financial Crimes Commission to get those who are flouting the law [on tax]."

Although Ms Omoigui's contract as Nigeria's tax chief ends in May 2007, she hopes to stay on "as long as I'm relevant."

But with continuity of policy - especially good ones - not being a trend that is familiar, especially when there is a change of leadership (as will happen when Mr Obasanjo leaves office in 2007) there is a reasonable fear that the serious work being done to reform tax regulations could come to naught.

But that holds no water with Ms Omoigui, who refuses to be pessimistic about the country's future.

"If we keep on thinking about the problems in Nigeria, we will not do anything to change things.

"I am an incurable optimist who believes in my country and we shall get things right with hard work."

A lot of people are hoping that she is right.

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