Is tax justice panacea for decent work?




The Nigeria Labour Congress (NLC), in collaboration with the regional office of the International Trade Union Confederation ( ITUC-AFRICA), recently held a workshop for young workers on Tax Justice. MOSES JOHN, who was at the event asks if tax justice is really the panacea to tax evasion .

The revelation by former South Africa President, Thabo Mbeki panel report that about 50 billion dollars leave the shores of Africa unaccounted for as a result of tax haven is an eye opener to the continent, considering the huge infrastructural gap.

The panel also revealed that these monies are much more than the amount of aids coming to the continent of Africa, hence the reason for the workshop which is to educate and create awareness for young workers and youth on the importance of paying appropriate tax.

Objective of the workshop

The two-day event which attracted youths from all affiliate unions of the congress, schools, churches, and unemployed in the society, is to expose them to the danger of tax evasion by mostly multinationals and how they can champion the campaign to stop the bleeding of illicit financial flow.

Speaking at the workshop, the International Labour Organisation (ILO) country director for Nigeria, Ghana, Liberia and Sierra Leone, Dennis Zulu said African leaders must use the recommendations by the Thabo Mbeki panel to stop the bleeding of illicit financial flow so as to channel the resources to creating decent work for the citizens.

He said if the people and multinationals don’t pay tax, the effect would be the absence of social amenities as well as unemployment due to non availability of job.

"The significant proportion of financial outflow from the continent is attributed to big businesses who avoid taxes and take these monies out of the continent. Following the Thabo Mbeki panel report which outlines the different initiatives that can stop the bleeding as the campaign says, it is very important therefore that we educate our young workers through the NLC so that they can understand what is really involved and the opportunity cost of this illicit financial flow".

He said "It is very clear that if people don’t pay the tax that is due to the big businesses, then there is serious cost in term of the lost social facilities and amenities not to be build using the tax revenue accrued to the country."

Continuing, the resource person noted that it "is a common knowledge that countries that depend on commodities which are exported to the developed west operate tax heaven, because we don’t have capacity on the continent with respect to taxation and having weak legislation that regulate tax environment.

"This makes it very easy for the big businesses with the world paid lawyers and accountants to seat and navigate to avoid paying taxes. So, it is important to educate our young workers so that they can be in the forefront through having the prerequisite knowledge to be able to advocate or lobbying government to stop the bleeding of financial resources out of the continent."

Kudos for Buhari government

While commending the President Muhammadu Buhari-led federal government for curtailing illicit flow of monies from the country, he urged the administration to ensure the recovered funds are invested back to bridge the infrastructural gaps in the country.

"And for Nigerians, a significant proportion of the illicit outflow is attributed to corruption, for us the development partners, is gratifying to know that the new government have taken serious measure to curtail the outflow of financial resources from Nigeria. I therefore hope that some of the resources that have been recovered can then be use for investment into the country through provision of training institution, health facilities, housing, water and sanitation for our people.”

According to him, "this can only be possible if we step up the campaign to stop this and if there is accountability on the part of businesses who are taken these monies out, as well as increasing the capacity of our enforcement agencies to be able to detect this illicit outflow. So we commend NLC for taken this initiatives and we look forward to working with them in subsequent measures aimed at curtailing illicit financial flow.

On the aids coming to the African continent, the ILO Director said "there are studies done that show that the amount of aids that is given to Africa is less than what have been taken out through the illicit financial flow".

Challenges to youth

Also speaking, the Coordinator, Human and Trade Union Right of the International Trade Union Confederation (ITUC-AFRCA), Comrade Joel Odigie said the programme is to train youths to be drivers of stop the bleeding campaign.

"We are talking about decent work and Tax Justice, in other ways, we are saying how can we use stopping the bleeding, halting illicit financial flows to advance decent work, because at the heart of decent work is the question of youths unemployment.

"If that is the case, the youths themselves should be the drivers of the process of halting the illicit flow. So the whole idea by the Nigeria Labour Congress and the International Trade Union Confederation (ITUC-AFRICA) is to get young workers to come together to seeks ways to gain knowledge on this issue, most importantly to get them into the continent wide campaign of halting illicit financial flow.”

He said with revelation that a huge sum of 50biion dollars leaves the continent through tax haven, young workers must protect their future by ensuring all businesses pay adequate tax due for the country.

Joel further noted that, the amount even though cannot address the infrastructural deficit on the continent, would go a long way to solve some challenges facing the continent.

"Young workers are at the heart of it. Illicit financial flow is like stealing their future. Today, we want to stop that. When you steal the future of youths, you are arresting development."

On whether a legislation should be enacted to check amount of currencies an individual can carry at a given time, the ITUC scribe said "in Nigeria there are laws that talk about how much you can carry at a given point, also how much you can deposit as well as withdraw at a certain time. In Nigeria there is no so much gap in terms of the law, but in tax legislation.

"For instance, Nigeria is into double treatise agreements. When you sign agreement with many countries, like Nigeria wanted to sign agreement with Mauritius and we know that this country operates like Tax haven. If you go there you will see a building with about 30,000 companies registered having their offices there.

"And these companies may not be there but doing business in Africa countries, but they will tell you their head office is in Mauritius and insist they are bringing to Mauritius research and development component, and this constitutes about 30 percent of the production cost. So, we have to transfer, so the money goes back to those places where nothing has happened form the countries where productive activities profit have been made were now short-changed in that process.

He also advised that "the laws can get better , particularly tax law that inflicts double taxation on the poor. On the cause of our campaign, we are saying the tax law that needs reform should be reformed.”

Expectations

A participant at the workshop and youth leader of the Nigeria Union of Local Government Employees (NULGE), Jamila Yusuf also spoke on her expectations.

"My expectation primarily, at the end of the workshop is to motivate other youths to play a role in stopping tax evasion, and to also ensure tax justice for progress and development of Nigeria".

Also speaking, the chairman of NLC youths, Comrade Victor Ekpo said "at the end of the programme, we should be able to enlighten the young people to know the effect of illicit financial flow on our future and what it is doing to the economy as well. Because some of the monies being stolen through tax evasion by the multinationals are supposed to be used to build infrastructure. So I believe after here we would organise and end this illicit financial flow."

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