Saturday, 15 July 2017

Beggars in Nigeria will start paying tax !



So says the Finance Minister of Nigeria. Beggars will have to pay taxes. Apparently some beggars are earning millions in Nigeria. Perhaps its fair enough that Mrs Adeosun , the Finance Minster said “proceeds from begging are taxable. You are supposed to pay taxes even if your means of income is begging”.

Nigeria is a notoriously corrupt country and tax evasion is blatant and has been elevated to a fine art.  Hence the startling "fact" that beggars are earning millions. Nigeria should, by all rights, should be a very prosperous country. It has oil wealth and is a net oil exporter. It has a  young , bright and growing population.  It has a decent education system and some of the ablest people in the African continent. It is a large economy - second largest after South Africa.  And yet, it is a huge underperformer economically. 

Periodically the Nigerian government tries to tackle corruption and the also shore up the country's finances. Bolstering tax revenue by cracking down on rampant tax evasion keeps getting tried periodically, but with not much success. The latest is the Voluntary Assets and Income Declaration Scheme ( with the unfortunate acronym - VAIDS) . Good luck for the latest attempt.

India suffers from similar evasion, with its own home grown quirks. Agricultural income is not taxed , but much of what is claimed as agricultural income has nothing to do with farming. Similarly the tax entity called Hindu Undivided Family is nothing but an institutionalised way to manage taxes.  The irony that "Undivided" and "Family" cannot be put adjacent to each other when it comes to money matters is completely lost on Ramamritham !

The United States being the leader of the world in all matters offers a rich variety of such dodges in the law. Walt Disney in Florida and other big landowners collectively dodged $950 m in  taxes by renting a few cows to graze on their large land holdings and thereby qualified as agricultural land inviting lower taxes. And since two of my usual commenters are from the great state of Oregon, they may wish to declare that two of their limbs are useless and thereby earn a tax credit of $50 !

Back to begging. Actually no country exempts the proceeds of begging from taxation. If your earnings from begging exceed the minimum threshold, you have to pay tax on it anywhere in the world. Mrs Adeosun was only stating an universal truth ! Beggars of the world, beware !!

5 comments:

Sriram Khé said...

Wait ... what? I can get "a tax credit of $50" by declaring that my limbs are useless?
That explains why the #Republican voters in my country are rich--they declared their brains are useless .... muahahahaha ;)

Yes, Nigeria is one hell of an under-performer in sub-Saharan Africa. What a terrible waste of its resources! Now, add to all that the problems from climate change, and Nigeria is that ticking time-bomb for various geopolitical problems ... :(

Anne in Salem said...

I can imagine very few governmental decisions that will be harder to enforce...

Ramesh said...

Oh actually easy to enforce. They aren't really trying to catch beggars. They are simply trying to catch somebody trying to buy a Merc, but who's claiming his income is not taxable because it is as a result of begging !!

Ramesh said...

Alas. Nigeria could be such a huge success story. Its squandering away all its talents. The brightest and the best is claiming that they shouldn't be paying tax as their income is out of begging :(

rakesh said...

give them a job and then take the tax from every one.

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