Oct 4 (Lagos) - This one is for the ears of the Honorable Finance Minister.
Government of India has just concluded a four month tax amnesty window where people could declare their unaccounted money and avoid any legal proceedings against them. They would pay a 30% tax on the declared money. India just recovered more than US 10 billion in the four month exercise. Among the people who declared hidden assets were some Mumbai road side food ( samosa snack ) sellers who declared more than $ 7.5 million.
India and Nigeria are very similar in the way that huge majority of the population in both countries do not pay tax. There are huge informal sectors in both countries where businesses is carried out on cash basis and tracking it is almost impossible. There is also an angle of corruption in both countries where people are able to evade paying taxes.
But the difference between India and Nigeria is that while India is the fastest growing economy in the world today, Nigeria is suffering from a self-inflicted economic recession. While the Indian Rupee has been stable around the 67 mark to 1 US Dollar, the Nigerian Naira has seen a free fall which is unprecedented and making people to wonder when it will end.
Another big difference is that India has foreign reserves of US 367 billion with US 21.5 billion in pure gold reserves, Nigeria currently has foreign reserves of only $ 24 billion.
But what is common is that majority of people in both countries live below the poverty line. India's population is 1.3 billion while Nigeria's is 175 million. India is about 4 times bigger that Nigeria in its size.
Also both the countries are democracies that make is very difficult to prosecute corrupt government officials as the judiciary plays a role which causes years of delays.
Now India has been cleaning up its economy since Narendra Modi became Prime Minister in 2014 and the Gandhi dynasty was pushed out by the people fed up with corruption in a decisive mandate. The tax amnesty was a way to get people to bring their hidden assets into the economy by assuring them that they will not be sent to jail if they pay a tax on their loot.
The way President Buhari came to power in Nigeria is similar to how Narendra Modi came to power in India. Both of them promised to fight corruption that had reached unprecedented levels in their nations. However while one has been able to turn the country around and make it a magnet for global investment, the other is still in the process of setting the fundamentals right probably because of years of neglect by past governments in most sectors apart from Oil and Gas which has seen crude oil prices slump.
Nigeria is facing same corruption issues but the problems are even bigger for us here. We have EFCC trying to prosecute so many people while those people have army of lawyers who can delay the case until the government finishes its 4 year tenure.
In fact some people feel that this government is spending so much time in going after corrupt people that it is not able to give enough time to the economy. Nigeria has no business being in a recession because it has the resources and the population to be one of the fastest growing economies in the world just like India if not better.
So why not implement the Indian tax amnesty scheme here so we can get these people to declare their hidden wealth, pay a tax to the government and avoid legal proceedings.
Everybody is happy at the end of the day. The hidden wealth that could be amassed will lead to a big tax gain for the country and the declared money will be invested in the country so the economy would grow.
It is a win-win situation. Nigeria wins either way. Or we could just arrest people, accuse them of corruption, start a legal case which will never end and keep publishing sensational newspaper headlines for the next three years. 2019 is coming closer and Nigerians are not happy.
Let us get on with fixing the economy. Live and let live.
We hope the finance minister would see this.
reporting for easykobo.com on Tuesday, October 4 2016 from Lagos, Nigeria