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Taxing a dying economy, national assembly and vanishing opposition

Taxing a dying economy, national assembly and vanishing opposition
May 13
13:45 2024

Margaret Thatcher, the British prime minister from 1979 to 1990, once declared that “no nation ever grew more prosperous by taxing its citizens beyond their capacity to pay.” The reasoning goes that taxing people more than they can afford to pay will only make the economy worse since the burden of taxes will make people less productive overall. Whether on purpose or accidentally, the Tinubu administration has disregarded this fundamental fact.

Any democracy’s ability to survive depends on the strength of its opposition. A democracy is nonexistent and a misnomer without opposition. There is overwhelming proof that the opposition has vanished from Nigeria’s democracy, and that is why numerous government policies have been approved without opposition members of the national assembly ever posing any questions.

Nigeria’s democracy lacking opposition implies that it is now verging into a one-party state. Because of this, the people of Nigeria are now stuck, helpless, and completely dependent on the ruling party’s capricious whims, as the All Progressives Congress’s federal government is not held accountable for the illegitimacy of its policies or made to take into account alternative or more viable policy options. As a result, the Tinubu government is just muddling through, causing stagflation, depression, and so much misalignment in the economy.

The opposition political parties never say anything except the sporadic statements made by Peter Obi of the Labour Party and Atiku Abubakar of the PDP. Furthermore, it is crucial to note that in democracies, the opposition is best expressed via the national parliament, which is not happening in Nigeria today. That implies that the national assembly is the main forum for echoing the opinions of opposition leaders like Atiku and Obi. But at the national assembly, mum is the word.

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For the avoidance of doubt, the identities of the opposition leaders in the senate and the house of representatives are largely anonymous. Nobody has witnessed them opposing the government’s anti-people policies, which include loans and bills that have a significant negative impact on the Nigerian people and the country’s economy, many of which have been approved by the National Assembly. The opposition leaders do nothing more than watch out for their fair share of largesse accruing to their positions as principal officers while permitting the government to enact laws that are impeding the growth of the country’s economy. They left Nigerian federal roads death traps and each quickly received their N160 million SUVs in a collapsing economy within weeks of the inauguration.

On the first day, the Tinubu Presidency was inaugurated when the president said that “fuel subsidy is gone” and that it was called “courage,” the betrayal of the Nigerian people by opposition politicians began to take shape. If the opposition is correct in believing that fuel subsidies should be eliminated, then there was no clear counter-policy direction from them for how to carry it out. Ibrahim Babangida, as military president, permitted critical policy debates among Nigerians even during his military rule. Yet, in a democracy where debate is a hallmark, significant life-truncating policies are forced down Nigerians’ throats because opposition parliamentarians are only warming chairs at NASS or working with the ruling class for very opaque reasons.

The government launched the fuel subsidy policy most carelessly and cruelly as possible, acting as though it was the only possible course of action because there was no pushback from the opposition. Encouraged by the opposition lawmakers’ complacency or collusion, the NLC and TUC’s confusion and weakness, and the CSOs’ misfortune comparable to that of the Nigerian people, the Tinubu presidency floated the naira, forcing the country’s currency to find parity with other major global currencies like the dollar, pound, euro, and yuan in the absence of any significant external reserves (backed by gold) or export base—essential prerequisites.

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Weeks after the economic measures were introduced, as was to be expected; they unleashed significant economic headwinds that brought the economy to stagnation. In a matter of weeks, inflation skyrocketed. Food inflation has surpassed 40% as of right now, and some commodities have seen inflation as high as 70%—a level of inflation never before seen in Nigerian history. Nigeria is currently experiencing stagflation, as prices for products continue to rise while the country’s economy remains stagnant. Almost 700 Nigerian manufacturing companies and international corporations have either closed their shops or relocated to more business-friendly nations like Ghana.

The Buhari administration sold off a large portion of the country’s crude oil in advance before leaving office. With the crude that is only partially there still accounting for up to 75% of export revenue, the Tinubu presidency has turned to taxes and loans to pay for government spending. The N3 trillion in loans from the CBN through Ways and Means are said to have been taken by the Tinubu administration in less than a year. The total amount of external debts has also reached about 10 billion dollars, bringing the nation’s debts to about N107 trillion. Nigeria is walking into a debt trap with her two eyes peeled.

There is no word from opposition lawmakers about any of these anti-people policies. The opposition lawmakers haven’t held a single news conference to inform Nigerians of the threats that lie ahead or the steps they are taking to compel the ruling party to adopt a patriotic perspective on important matters.

In addition to fuel subsidy removal, the government has now instituted a cybercrime levy. Nigerians should be concerned about this law and levy for a certain reason. Numerous voices have been raised opposing the imposition of the tax. However, it appears that the true issue is going unanswered: when was the Cybercrime Act revised in 2024 to shift the 0.005% online transaction tax to 0.05%?

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The little that one knows about the legislative process is that a bill must pass three stages and then be given to the president to be signed into law. A bill is referred to a committee or committees (when the issues are multifaceted and touch on the duties of more than one committee) when it passes after a second reading. The actual job is done by the committee or joint committees. Through what is known as a public hearing, experts and stakeholders are invited to share their professional opinions and well-informed concerns.

It is also anticipated that members of the public will show interest and express agreement or disagreement on the proposed bill. Public hearings are frequently publicised for this reason. All of the important views will then be included in the committee report to the plenary and serve as the foundation for the third reading, which will determine whether the bill passes or fails in part or its entirety. Therefore, the question is: When did the president sign off on the amended Cybercrime Act of 2024, which moved the 0.005% online banking transaction tax to 0.05%? And when was the public hearing held for amendment? Once more, what did the opposition lawmakers say about the bill’s amendment when it was read and approved three times?

Are the opposition members claiming they are unaware of the effects of raising the tax from 0.005 to 0.05 on the hapless Nigerian people and collapsing the Nigerian economy? For instance, if one’s math is right, a transfer of N500,000 will attract N25,000 instead of N2,500 under the previous rule before the mysterious alteration. To avoid this, most Nigerians will return to the queue in the banking halls with their checks and tellers for cash. This will reverse the cashless policy, which has already gained traction. The volume of online transfers in Nigeria in 2023 alone was over 600 trn, 0.05% of which is N3 trn, which the government is now after.

As previously stated, the Tinubu administration is depending on loans and taxes to finance its operations, as it is unable to halt oil theft even after the president assumed the position of minister of petroleum and cannot raise crude oil production sufficiently to meet the OPEC quota and rake in more revenue and foreign exchange. The government has now turned to the Nigerian masses to raise money through tax. Strangely, in Nigeria, it is the masses that feed the rich, whereas it is the rich that feed the poor in developed economies.

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As stated, it is inhumane and reckless to impose a tax on citizens who are unable to pay, and we have heard that the government is preparing to implement a telecom tax also as a precondition of the Bretton Woods institution (the World Bank) to secure yet another 750 million dollar loan.

Amidst all of this, one can’t help but wonder: Where are the opposition lawmakers in Nigeria’s national assembly? Do they know their role in a democracy? Do they realise the risks to Nigeria’s democracy’s growth and survival that come with their complacency, complicity, or both? Is it their goal to help the ruling APC achieve a one-party state in Nigeria, or are they unable to recognise that the country is on the verge of becoming a one-party state?

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Dr. Law Mefor, an Abuja-based forensic and social psychologist, is a fellow of The Abuja School of Social and Political Thought. He can be reached via [email protected]; Twitter: @Drlawsonmefor.

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