Last week, we published an article on how the Nigerian government needs to improve the current tax structure to improve its collection, especially from remote workers in Nigeria.
Although the article focuses on how the government can collect more from the citizens, we also recognize that Nigerians are not favorably disposed to paying taxes. About half of those surveyed by the Nigerian Economic Summit Group (NESG) think tax evasion is bad but understandable. The reaction of many of our readers to reading this story last week echoed the survey results.
This reluctance stems from the fact that people feel that the government has not lived up to its part of the social contract of taxation. Taxation as a form of social contract is a common development phenomenon in which people enter with the government where they pay a portion of their income in return for improved social welfare. Therefore, taxation creates a vertical (between the people and the government) and horizontal (between the people themselves) contract. In this way, people agree to give up some economic independence to support the government in achieving a collective goal of societal development.
Paying taxes, people say; I will give 10% of my income each month to the government to improve my life and that of other citizens, which is the vertical aspect of the social contract. The horizontal link here is an agreement between the people themselves to improve their collective life by contributing to the well-being of the whole of society.
Once one party (the government or the individual) fails to fulfill its part of the obligation, the contract is broken, and
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