TAX AND FISCALITY AS MEASURES OF ELITE INTELLIGENCE

VICTOR C. ARIOLE argues for a mix of France and Japan taxation approach

The northern political ‘elite’ must develop a mindset that comprehends the reality that governance is about service to the people, building capacities, developing human resources, bettering the living conditions of a people, and challenging the environment to “escalate” its potential for “economic” growth and “optimality” – Abdullahi Ismalia Ahmad.

Taxation and fiscal probity are now testing governance processes in France with the dissolution of the shortest – lived France government of Michel Barnier who presented a tax process that reduced France’s deficit to 60 billion euro, and hardline stance on migration; quite favourable to the extreme right in a parliament dominated by coalition of centre left. The President, Emmanuel Macron of center neither right nor left, just does not believe that adopting fiscal

policies favourable to the left or center left of taxing up to 90% of earnings in the highest bracket earners is helpful to France that is looking forward to emulating fiscal approaches of USA, though magical to some France’s elite. To the left, stimulus packages must be promoted alongside migration policy that allows the Maghrebian semi-skilled workers to enter France as against restriction. To them also, France cannot afford the magic economy they assume goes on in USA.

Macron, upholding France’s business elite’s mindset, remains adamant in never allowing the Prime Minister to be entirely leftist minded, hence his next step in appointing Francois Bayrou, who is of farmer’s background, once a teacher and veered mostly into centrist political flavor for over 40 years. With Bayrou, agro-industry and enhancing purchasing power of the French person are the foremost pillars for his governance process; and that means lower tax and more agro-industrial activities so as to restore confidence in French people of their food security and purchasing power parity.

This is not the case for Japan as its 2025 fiscal disposition intends to hike corporate tax and consumption on tobacco and related products so as to have more funding for its defense spending. It also succumbed to partial request of its own center party as tax holiday for people earning below Y1.23 million as against Y1.78million of center right or liberal proposal. That is, no tax for those earning below $8000. It is negotiated based on elite consensus of concern for lower earning group and channeling resource to defence needs of Japan as its rich coastal and its energy value chain contents are currently threatened by Chinese and North Korea military adventures. Here, again, spending on defense is meant to enhance production and encourage greater employability of low earners.

When one relates both Japan and France’s concerns to that of Nigeria, the missing gap is weak elite intelligence process, never backed by any national interest pegging. The fragmented France’s parliament agrees fundamentally on not letting down the worker’s welfare and the agro-industrial base that make its treasury competitive, and what France’s Christine Lagarde, the President of European Union Bank expects of France. So, with Francois Bayrou, some political cum economic stability is expected. Already Marine Le Pen, extreme right leader expects better deal with Bayrou.

For Japan, tax reform is approved to enhance national earning for defence spending so as to ensure expansion of low earners employability capacity as the coastal activities are ensured of better security. For France, the President is still the unifying force as he continues working out the best option to coalesce all the dissenting parties with his choice of France’s national interest minded Prime Minister.

Nigeria ought to emulate both the negotiating behaviour and the direction of spending that make tax reform quite bearable by both the lower earners and the missing agro-based industries as security issues turn taxation useless. Indeed, taxation in Nigeria seems a southern issue as the north is so much drained of insecurity that the workforce is practically not there. Are you proposing tax payment for a place ridden by over three million displaced people? A place where mostly banditry, kidnapping and politricking are the features of taxable activities and no one dares taxing them? Can anyone be sincere enough to tell us how much the legislatures and politicians pay as tax? Tax reform based on capturing seamless economic and industrial activities going on in an environment leveraged by the government as claims of having put in place ease of doing business, encourages payment of tax and in some cases it is annually or doctrinally reviewed by the kind of Party in power.

Taxation is either an annual re-evaluation exercise or premised on long and short term national developmental directions. Let’s assume that the 2025 budget’s basic principles are as stated, securing peace and building prosperity. Unless there is deliberate attempt by Northern elite to keep Nigeria as a perpetual “Bambara” economic country; that is, a country that sees financial buoyancy as capable of derailing the spiritual connect with the Creator. Note that it is the problem with the Sahel countries of Burkina Faso, Mali and Niger as they are deeply-minded Bambara countries. They frown at luxurious flamboyance. Their cousins are in Nigeria. However we are all Africans and the prosperity of one African country must attract interest for emulation by others. How to get a worthy consensus of the values Africans must cherish and promote is crucial. Bambara economics is like Lenin-Marxist economics centered on mostly manual and professional inputs to national economy for the wellbeing of all as against competition and entrepreneurial inputs that must factor in profits. Today, the world knows that it is not working as proposed by Lenin and Marx as Russia and China, the leading proponents, are neither here nor there in sustaining it. So, what makes it thrive in the north of Nigeria where its politicians are living in opulence?

Here again the elite could be missing the Amadou Hampaté Ba’s sage advice. When you see someone who goes every day seeking for his daily bread and you feel he is wasting his time and you instruct him to relax; and he, in turn, just begs you to help in filling his pocket with sand that is abundant in your doorstep every day. So for days the rich man bent down to fill the pocket till one day he felt it was an insult and he chased away the “daily bread” pursuit worker. It is not far from the then poor people who are now bandits and kidnappers. Or as once expressed by Governor El- Rufai that herdsmen who were once contented for receiving 100,000 naira for tendering cows for the cow owners do not find it lucrative compared to their resorting to banditry and kidnapping business.

So, to the Northern elite, let the weariness of claiming the provider of the poor ones seize now and let the tax net be expanded including those who must be put to work in the vast land of the north. VAT, according to Ahmad, is consumption tax based on production, and production activities based on land, capital and labour are in abundance in Northern Nigeria, almost to the point of waste.

So, if securing peace and building prosperity is to be achieved, elite consensus on how to build human resource and how to secure their place of labour should be clearly agreed upon and tax collection enhancement viewed from that perspective. For now, that consensus is not converging enough for a centripetal appreciation that makes for a cohesive national interest directed. Between capitalism/bourgeois minded elite and bambara/marxist minded elite, let taxation approach be a mix of what France and Japan are mindful of.

 Ariole is a

Professor of French and Francophone Studies,

University of Lagos