, By Wasiu Babalola
It is no more news that virtually all the states of the Federation have been on redirection towards revamping their revenue generation basis from solely relying on proceeds from oil sector to taxes as the only reliable means of revenue generation.
Tax, by definition, is a financial charge or other levies imposed on a taxpayer (an individual or corporate entity) by a state or the functional equivalent of a state to fund various public expenditures like: Infrastructure Projects, Public Security, Health Services among others.
Infrastructure: There is no gainsaying that, Government needs resources to construct roads, bridges, rebuild schools and a number of other projects which are also germane for the society growth. Relying on government alone to fund these types of projects is no longer feasible as a result of the dwindling revenue from government purse.
Public Security: Money collected from taxes goes a long way in securing lives and property of individuals and corporate bodies. Security consumes a lot of money, hence, a Trust Fund, just as being in place in Lagos State would go a long way in securing lives and property. Such money-consuming project could only be achievable only if private organisations and public spirited individuals could team up with the government through donations both in cash and equipment to actualize this dream. If lives and property are secured, people would be confident to embark on their daily activities without any hindrance.
Health Services: Government sees it as her primary assignment to provide free or subsidised health service to its citizens. This may include preventive immunisation shots, disaster relief and many others. All these and many more are funded from taxpayers’ money. This is why it is incumbent on every individual who earns income and corporate entities to see tax payment as inevitable. Failure to pay, or evasion of or resistance to taxation, is usually punishable by law.
Tax is of various types depending on the scope of income operation. People have been accustomed to various types of taxes like, income tax, company tax and value added tax, but hardly do people know about the one called withholding tax; even majority of the people that do pay withholding tax do not do it rightly, especially with regards to the address of the recipient of such tax.
Withholding Tax is an Income Tax withheld from employees’ wages and paid directly to the government by the employer. It is a tax levied on income in form of dividends, rents, interests, director’s fees, gambling winnings, commissions etc from securities owned by a non-resident. The amount withheld is a credit against the income taxes the employee must pay during the year. And how this tax (withholding Tax) is paid to the state depends on the address that the tax payer used in his or her ‘Employee’s Withholding Allowance Certificate’.
Now, this is the area of concern. Based on the recently conducted research on Withholding Tax, tax on withholding that is due to the coffers of the state being presently used to develop some states of the federation.
The State of Osun in particular, is losing revenue to the tune of N10 billion yearly as a result of non-remittance of withholding taxes of Osun indigenes transacting businesses in other states. This comes about, just because the various Osun indigenes in other states (I mean, taxpayers on withholding tax) did not use Osun address in their ‘Employee’s Withholding Allowance Certificate’, instead, they used other address perhaps, the address of where they live. Meanwhile, taxpayer’s address is the prerequisite for tax remittance and the determinant on where to remit as far as Withholding Tax is concern.
It is therefore, disheartening to note that huge sums of money which ought to have accrued into the coffers of the government of Osun is lost, due to a simple reason of the address of where the payee resides. Osun can be financially independent with the support of all and sundry since ‘it takes the rubbing of two hands to make both hands clean’.
The appeal therefore goes to all residents and indigenes of the state, home and abroad to join hands with the Government in financing the ongoing developmental projects through the payment of taxes. This call is on all Osun indigenes transacting businesses in other states; let’s be patriotic to our state, let’s remit our withholding taxes to the coffers of the state by simply using Osun address for the Withholding Taxes related transactions with various public and private companies we transact business with. Osun government is committed to building a vibrant economy aimed at boosting commerce, industry and improving the welfare of the citizenry.
We can together achieve this by contributing our quota through tax payment.