Anambra State Governor, Charles Chukwuma Soludo, is not having the best of times. And he shouldn’t really. His mission in Government House, Awka is not to have a walk in the park. He is there to work, and work he must. Keke (commercial tricycle) riders are up in arms against him after he imposed draconian taxes on them. Each keke operator is expected to cough up tax on his keke equivalent to the minimum wage the government pays a civil servant every month. And it doesn’t matter if the keke is at work earning money or not. Once a keke is registered with Anambra State Government, it must begin to pay compulsory tax to the government.
It is not only keke riders that will pay tax to the government in the state government’s latest tax regime. Store owners, street traders, commercial vehicles and many other categories of business owners. The protests are already on and government crisis and information managers are responding accordingly.
Soludo came on high expectation and promise to turn Anambra to a kind of Dubai in infrastructure development and Taiwan in industrial and technological development; and the voters believed he could do it because he has antecedents on his side. He transformed Nigerian banks and made them mega banks when he was the Governor of the Central Bank of Nigeria. Not a few thought he could pull it. But he did it.
So, when he offered to run for Govenor of Anambra State, the people bought into that offers; they believed he was the one that the state, with its deluge of mega-billionaires and business entrepreneurs, needed to convert from a crawling bus station state to a top level economy. After all, the potential were all lying there. They only needed an intellectual that had been tested in the field to convert the crude economy of Anambra State to an economy driven by knowledge.
Anambra, many believe has no business competing with moderate states in Nigeria, whose capital and revenue base is below a billion dollars. Anambra should be competing with Lagos, Abuja and Rivers as the top economies in Nigeria, nay Africa. If Lagos has the ports and industries, Abuja, the federal capital and Rivers, oil then Anambra has human and business capital. And human capital is the new capital. It changes economies like magic. In elementary economics, five factors top in determining demand. They are price, price of related commodities, market, income of the consumer and population. Anambra has them all and the man in its saddle is a professor of economics, tried and tested.
It’s been over a hundred days since he signed in as governor. But the star boy of Uga Boys is still being blown from one side of the state to the other looking for balance like a dry reed in harmattan. He did promise to hit the ground running; and a day after he was inaugurated he did run to Okpoko, the biggest slum in Southern Nigeria outside Lagos. He abandoned his guests in Awka to the dance in the ghetto with Okpoko residents.
He promised to provide jobs. He promised security and a clean environment. But up till now, the governor’s fingers are shaking, shaken by unknown gunmen, who wanted to spoil his party and we’re beheading prominent citizens of the state. He finding it difficult to discover his rhythm. The 4,000 teaching jobs promise is muddled up in a quandary with his commissioner for education calling job seekers idiots and fithy people. Security may be returning, but that is after a bloody campaign. But the environment is stinking.
Though he was his predecessor’s man Friday, he didn’t get close enough to know that Willie Obiano was emptying the treasury. He is shocked at the state of the treasury, which he admitted in TV that in a mess. There is no money to pay mounting bills, and with the notoriety that Nigerian governments have attained in repudiating debts they willingly accumulated, no one wants to lend a Nigerian state government money.
The options available to him are therefore dire. Cut spending and raise taxes. A lawmaker was shocked that in the revised budget he sent for approval to the house if assembly, education got only N300 million, while the budget for roads was overinflated. But Soludo should know. It’s not enough to answer dike (strongman) in Igboland. A man must earn it. Mgberede kain je ama dike. It is suddenness that we use to know a strong man.
But the governor wants to fleece the poor, the people he should protect against the vagaries of hardship, to pay for government services. Soludo used to be a Marxist as a student, a friend of the poor masses, the talakawa. Even in capitalism, the rich is taxed to feed the poor. But in Anambra under Soludo, the poor is being taxed to feed the rich.
Tax should be directed at income, not activity. This is what is called the ad valorem tax. It is a progressive tax regime that targets value of items taxed and not the unit or quantity. The more you earn under the ad valorem regime, the more tax you pay. Soludo knows this but he has decided to impose tax on the poor. The truth is that the kind or tax Anambra State Government just reeled out will lead to spiralling inflation and hardship because the burden of tax will just be passed on to the consumers. Demand for transportation services by keke and buses is inelastic and no matter how high the fares are people will pay for them. If government must tax transportation providers, it should provide the people with alternative transportation; put buses on the road.
If the state government wants to raise money through taxes, the people to tax are there, the big men who drive luxury cars, keep luxury apartments, hold luxury parties and stay in luxury hotels. People who ride in convoys of vehicles should pay, people who drink costly champagnes. The state is full of people who spend money on luxury which does not impact government purse.
Tax luxury goods and services, cut padded budgets and provide the enabling environment for business to thrive and the money will come.
Emmanuel Obe,
koteobeeleme@gmail.com
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