Sustainable development goals and taxation in Nigeria

Abstract

The pursuit of developmental objectives especially those related to human/social welfare like the SDGs is often hampered by funding constraints. Hence domestic resource mobilisation is critical to sustenance of developmental programmes. A key message of SDG 17 is that partnership between governments and the private sector is needed to mobilise private resources to deliver the SDGs. This paper contends that one way this partnership can be actualised in Nigeria is through the principles of taxation considering the strong relationship between taxation and development. It recommends that developing a strong tax system is necessary to sustain the funding of SDGs.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 UNDP, ‘Background of the Sustainable Development Goals. <https://www.undp.org/content/undp/en/home/sustainable-development-goals/background.html> accessed 18 September 2019.

2 About the Sustainable Development Goals, <https://www.un.org/sustainabledevelopment/sustainable-development-goals/> accessed 14 September 2019.

3 Culled from Muhammed Tawfiq Ladan, ‘Achieving Sustainable Development Goals (SDGs) in Africa through Effective Domestic Laws and Policies on Environment and Climate Change.’ A Paper Presented at The International Seminar on Environmental Law, Human Rights and Climate Change in a Post 2015 World: Global Call, Local Action Organized by the University of Nigeria, Nsukka in Collaboration with Stockholm University, Sweden on 2–3 November 2016, at University of Nigeria, Nsukka.

4 Ibid 4.

5 The Sustainable Development Goals Center for Africa, ‘2019 Africa SDG Index and Dashboards Report’ 2. Available at <https://sdgcafrica.org/reports/> accessed 19 September 2019.

6 Ibid vii.

7 Ibid 7.

8 Carthal Long and Mark Miller ‘Taxation and the Sustainable Goals: Do Good Things happen to those who Tax More’ Briefing Note (April 2017, 11). Available at <https://www.odi.org/publications> accessed 8 March 2020.

9 Invetopedia, What Causes Oil Prices to Fluctuate?’ Global Trade Guide. Available at <https://www.invesopedia.com/ask/answers/012715/what-causes-oil-prices-fluctuate.asp> accessed 19 September 2019.

10 UNDP, Nigeria 2015 ‘Millennium Development Goals- UNDP End Point Report’ xxiii (see also xxvi on challenges with the implementation of the SDGs.) <https://www.ng.undp.org> accessed 19 September 2019.

11 Godwell Nhamo, ‘New Global Sustainable Development Agenda: A Focus on Africa’ (2017) 25 (n 3) Sustain Devel 237. Available at <https://onlinelibary.wiley.com/doi/abs/>. accessed 6 March 2020.

12 Cristina D’Alessandro and Leo C. Zulu, ‘From the Millennium Development Goals (MDGs) to the Sustainable Development Goals (SDGs): Africa in the post-2015 Development Agenda. A Geographical Perspective’ (2017) 36 (n 1) Afr Geogr Rev 10.

13 UNDP, Nigeria 2015 ‘Millennium Development Goals- UNDP End Point Report’ (n10).

14 Goal 1:No Poverty <https://www.un.org/sustainabledevelopment/poverty/> accessed 14 September 2019.

15 Ibid.

16 Goal 2 Zero Hunger, <https://www.un.org/sustainabledevelopment/hunger/> accessed 14 September 2019.

17 Ibid.

18 Goal 4: Quality Education <https://www.un.org/sustainabledevelopment/education/> accessed 14 September 2019.

19 Ibid.

20 Goal 3: Good Health and Wellbeing <https://www.un.org/sustainabledevelopment/health/> accessed 14 September 2019.

21 Ibid.

22 Goal 11: Sustainable Cities and Communities <https://www.un.org/sustainabledevelopment/cities/> accessed 14 September 2019.

23 Ibid.

24 Goal 9: Build Resilient Infrastructure, Promote Sustainable Industrialization and Foster Innovation <https://www.un.org/sustainabledevelopment/infrastructure-industrialization/> accessed 14 September 2019.

25 Ibid.

26 About Sub-Saharan Africa: Africa at a Turning Point, <https://www.africa.undp.org/content/rba/en/home/regioninfo.html> accessed 21 November 2019.

27 United Nations, Department of Economic and Social Affairs, ‘World Population Prospects, Population Division (2019): Data Booklet <https://population.un.org/WPP2019-DataBooklet.pdf> 13, accessed 21 November 2019.

28 Ibid 15.

29 United Nations, Department of Economic and Social Affairs, ‘World Population Prospects, Population Division (2019): <https://www.un.org/development/desa/publications/world-population-prospects-2019-highlights.html> accessed 11 November 2019.

30 UNDP, ‘More Nigerians are Multidimensional Poor than a Decade before 2017 ‘<https://www.ng.undp.org/content/nigeria/en/home/presscenter/pressreleases/2019/new-data-challenges-traditional-notions-of-rich-and-poor-html> accessed 19 September 2019.

31 Ibid.

32 See Olawale Ajimotokan and Udora Orizu ‘Nigeria Requires $3trn to Solve Infrastructure Deficit, Says FCDA’ All Africa <https://allafrica.com/stories/201908050055.html> accessed 11 November 2019.

33 Dhruv Gandhi, Africa in Focus: Figure of the Week: Gaps in Nigeria’s Public Infrastructure’ <https://www.brookings.edu/blog/africa-in-focus/2018/03/14/figure-of-the-week-gaps-in-nigerias-public-infrastructure/amp/>accessed September 2019.

34 PIDA: ‘Africa’s Infrastructure Deficit and Risk Mitigation’ <https://www.au-pida.org/news/africas-infrastructure-deficit-and-risk-mitigation/> accessed September 2019.

35 Eghosa Osa Ekhator, ‘Barriers to Implementation of SDGs in Africa: The Need for Effective Business and Government Collaboration’ Afronomics Law Blog, 29 November 2019. 2/7. <https://www.afronomicslaw.org/> accessed 29 November 2019 or <https://blogs.dal.ca/dlj/> accessed September 2019.

36 Carthal Long and Mark Miller ‘Taxation and the Sustainable Goals: Do Good Things happen to those who Tax More’ (n8), 2.

37 S14(2)b.

38 S16(2)b

39 See section 16(1)b

40 S15(2) a, s17 (3) d., s18.

41 The provisions of CFRN 1999 referred to above are part of Chapter 2, Fundamental objectives and Directive Principles of State Policy which are generally not enforceable by virtue of section 6(6)b of CFRN 1999. However, section 13 of CFRN 1999 mandates all organs of government to observe and implement the provisions of chapter 2 of the constitution. Hence, the contemporary approach to interpreting fundamental objectives and directive principles is to construe the provisions of chapter 2 in a manner that gives effect to its provisions and deliver the intended protection/benefits to the people. One such way is to read its provisions together with the provisions of chapter 4 of the constitution which is on fundamental rights. For instance it is argued that the right to life should be interpreted to include the means of staying alive like access to healthcare, access to safe educational and transport facilities. Thus a community reading of section 33(1) of CFRN 1999 which provides that ‘Every person has a right to life ..’ and sections 14, 15, 16, 17 and 18 of CFRN 1999 creates a duty on the government to provide for the welfare and security of the people and makes the relevant provisions of chapter 2 enforceable. See For instance, the decision of the Indian Supreme Court in Mullin v. Adm'r, Union Territory of Delhi (1981) 2 S.C.R. 516, 518 (India) where it the held that the directive principles relating to food, shelter and a decent livelihood are essential to human dignity and are therefore enforceable and interpreted as right to life and right to ‘live with dignity.

42 Nigeria was one of the countries that adopted the SDGs. By this singular Act, it has taken a positive step contemplated under section 13 of CFRN 1999, to commit towards the protection of social economic rights.

43 Temidayo Olabode Akenroye, Håvard Mokleiv Nygård and Ama Eyo, ‘Towards Implementation Of Sustainable Development Goals (SDG) In Developing Nations: A Useful Funding Framework’ (2018) 21 (n 1) Int Area Stud Rev 3–8, 4.

44 United Nations, Financing for Sustainable Development Report 2019, xvii. <https://www.un.org/development/desa/publications> accessed 8 March 2020.

45 Ibid xviii.

46 Ibid 19.

47 UNCTAD, UN Launches One Stop Shop for Development Finance’ available at <https://unctad.org/en/pages/newsdetails> accessed 19 September 2019.

48 Ibid.

49 UNCTAD, Financing Needs and Debt Sustainability in Africa’ available at <https://unctad.org/en/pages/newsdetails> accessed 19 September 2019.

50 Nigeria- Sustainable Development- the United Nations, ‘Implementation of the SDGs: A National Voluntary Review’, 63, <https://www.sustainabledevelopment.un.org> accessed 25 November 2019.

51 Premium Times, ‘Nigeria Needs $337bn to Implement SDGs from 2019 -2022-UN’ 27 December, 2018, <https://www.premiumtimesng.com/news/headlines/302970> Accessed 25 November 2019.

52 AFDB, ‘African Economic Outlook 2019.’ Available at <https://www.afdb.org/en/knowledge/publicatios/afrcan-economic-outlook> accessed 19 September 2019.

53 The World Bank, Africa Overview. Available at<https://www.worldbank.org/en/region/afr/overview> accessed 19 September 2019.

54 Abbi Kedir, Adam Elhiraika, Zivanemoyo Chinzara and Diderot Sandjong, ‘Growth and Development Finance Required for Achieving Sustainable Development Goals (SDGs) in Africa.’ (2017) 29 (n S1) Afr Dev Rev 16.

55 See Yomi Kazeem, ‘Nigeria’s Economy is Making a Comeback-But Its Still Not Happening Fast Enough’ Quartz Africa <https://qz.com/1807355/nigerias-economy-has-best-quarterly-growth-since-recession/> accessed 7 March 2020.

56 Temidayo Olabode Akenroye, Håvard Mokleiv Nygård and Ama Eyo, (n37), 5.

57 Ibid.

58 See Report of the Intergovernmental Committee of Experts on Sustainable Development Financing 2014, cited in Rotimi Jaiyesimi, ‘Implementation of The SDGS In Africa.’ (2016) Afr J Reprod Health (Special Edition On SDGs); 20(3): 15.

59 Temidayo Olabode Akenroye, Håvard Mokleiv Nygård and Ama Eyo, (n37) 5–7.

60 Godwell Nhamo, ‘New Global Sustainable Development Agenda: (n11) 237.

61 See Derek Osborn, Amy Cutter and Farooq Ullah, ‘Universal Sustainable Development Goals: Understanding the Transformational Challenge for Developed Countries. Report of A Study By Stakeholder Forum (May 1, 2015). Available at <http://www.stakeholderforum.org/sf/> or <https://genderandebvironment.org/resource/universal-sustainable-development-goals-> Where developed countries are urged to continue to assist the development process in developing countries, particularly the least developed countries and to deliver on their long-standing pledges to commit 0.7% of their Gross National Income (GNI).

62 UNDP, ‘Background of the Sustainable Development Goals. <https://www.undp.org/content> accessed 8 March 2020.

63 Addis Ababa Action Agenda, Sustainable Development Knowledge Platform. Available at <https://sustainabledevelopment.un.org/index.php.php> accessed 19 September 2019.

64 See Financing for Development,’ Addis Ababa Action Agenda’ The Final Text of the Outcome Document adopted at the Third International Conference on Financing for Development, Addis Ababa, Ethiopia, 13–16 July 2015, 17.

65 Rotimi Jaiyesimi, ‘Implementation of the SDGS in Africa’ (n 62) 15.

66 World Heath Organisation ‘Public Financing for Health in Africa: from Abuja to the SDGs’ 2016. <http://www.who.int/health_financing-africa/en/> accessed 19 September 2019.

67 Goal 17: Revitalize the Global Partnerships for Sustainable Development <https://www.un.org/sustainable/development/globalpartnerships/> accessed 14 September 2019.

68 Goal 16: Promote Just, Peaceful and Inclusive Societies <https://www.un.org/sustainabledevelopment/peace-justice/> accessed 14 September 2019.

69 Goal 16: Peace, Justice and Strong Institutions <https://www.un.org/sustainabledevelopment/peace-justice/> accessed 14 September 2019.

70 In Nigeria, there is no legislative definition of tax. However, Chapter one, paragragh 1.2. of the National Tax Policy (Adopted by the Federal Executive Council on the 1st of February, 2017) defines tax as: ‘…any compulsory payment to Government imposed by Law without direct benefits or return in value or a service whether it is called a tax or not.’

71 Eurostat, ‘Tax Revenue Statistics; Available at <https://ec.europa.eu/eurostat/statistics-explained/index.php/Tax_revenue_statistics> accessed on 19 September 2019.

72 OECD ‘Revenue Statistics in Africa 2017’ <http://www.oecd.org/tax/tax/revenue-statistics-africa-2017-2617653x.htm> accessed on 19 September 2019.

73 OECD ‘Revenue Statistics in Africa 2019-Nigeria’ <http://www.oecd.org/revenue-statistics-africa-nigeria.pdf> accessed on 11 April 2020).

74 See the Full Text of Acting President, Yemi Osinbajo’s Speech at the Opening of Voluntary Assets and Income Declaration Scheme’ <http://dailypost.ng/2017/07/01/full-text-acting-president-yemi-osinbajos-speech-opening-voluntary-assets-income-declaration-scheme/> accessed on 25 October 2017.

75 Ibid. Under the PAYE system employers have an obligation to deduct Personal Income Tax of employees and remit same to the tax authorities pursuant to the provisions of section 2 of the Operation of the Pay As You Earn Regulations 2002, which is made pursuant to section 81 of the Personal Income Tax Act. In practice only Government organisations and organised private sector comply with this provision. It has been difficult to tax the informal sector which is largely unorganised under this system.

76 Ifeanyin Anuba, ‘Nigeria Earned N35tn From Tax In Eight Years-FIRS’ <https://punching.com/nigeria-earned-n35tn-from-tax-in-eight-years-firs/> Accessed 25 November 2019.

77 See Nobert Osemeke, David Nzekwu and Robert O. Okere, ‘The Challenges affecting tax collection in Nigerian informal economy: Case study of Anambra State.’ (2020) 12 (n 2) J Account Tax 64–67.

78 N´estor Castañeda, David Doyle, and Cassilde Schwartz, ‘Opting out of the social contract: Tax morale and evasion,’ (n 3) 1.

79 R. Prabhakar, ‘What Do The Public Think of Taxation? Evidence from a Focus Group Study in England.’ (2012) 22 (n 1) J Eur Soc Policy 77-89, culled from Yenni Mangoting, Eko Ganis

Sukoharsonob and Rosidic, Nurkholisd, ‘Developing a Model of Tax Compliance from Social Contract Perspective: Mitigating the Tax Evasion’ (n 24), 970.

80 See, Statista, ‘Average annual OPEC crude.oil prices from 1960 to 2019’ <https://www.statista.com/statistics/262858/change-in-opec-crude-oil-prices-since-1960/> accessed on 19 September 2019.

81 Carthal Long and Mark Miller ‘Taxation and the Sustainable Goals: Do Good Things happen to those who Tax More’ (n8) 11.

82 Carthal Long and Mark Miller ‘Taxation and the Sustainable Goals: Do Good Things happen to those who Tax More’ (n8) 2.

83 Ibid.

84 At the Addis Ababa Conference, Justine Greening, the UK Secretary for International Development observed that ‘strong tax systems…will enable developing countries to reap the benefits of growth an build stronger health and educational systems’ <https://www.gov.uk/government/news/greening-tax-generation/> Cited in Carthal Long and Mark Miller ‘Taxation and the Sustainable Goals: Do Good Things happen to those who Tax More’ (n8) 2.

85 UNDP, ‘Nigerian Transitional Strategy to SDG’ 18. <https://www.undp.org> accesssed 25 November 2019.

86 Ibid 34.

87 Ibid.

88 Eghosa Osa Ekhator, ‘Barriers to Implementation of SDGs in Africa: The Need for Effective Business and Government Collaboration’ (n35), 3/7.

89 Presidential Executive Order no 007 of 2019: Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Order 2019.

90 Section 1 (2)(a).

91 Section 1(3).

92 Section 2 (1).

93 Section 2(4).

94 Section 4(2).

95 Section 3(1).

96 Section 5(1).

97 Alexis Akwagyiram and Chijioke Ohuocha, ‘RPT-Nigeria Uses Tax Credits for Private Fims to boost Infrastructure’ Reuters, <https://www.google.com/amp/s/mobile.reuters.com/article/amp/af/idAFL5N25V663.

98 NIPC, ‘Executive Order 7: Dangote, 5 others to Execute 19 Road Projects in 11 States.’ <https://nipc.gov.ng/2019/01/28> accessed 23 August 2020.

Additional information

Notes on contributors

Newman U. Richards

Dr. Newman U. Richards, holds PhD, LLM and LLB degrees from the Nnamdi Azikiwe University, Awka, Nigeria and the University of Benin, Benin City, Nigeria, respectively. He is a Lecturer in Law at the Faculty of Law, University of Nigeria, Enugu Campus, Enugu, Nigeria, where he teaches Tax Law.