Tax compliance for international passport unconstitutional
The 1999 Constitution of the Federal Republic of Nigeria & Fundamental Rights (Enforcement Procedure Rules) 2008;
Chapter iv – Fundamental Rights, section 41, subsection 1, declares
Every citizen of Nigeria is entitled to move freely…and no citizen of Nigeria shall be…refused entry thereto and exit therefrom
This provision has set the stage for a battle between the citizenry and the Federal Government following a plan to make evidence of tax payment a prerequisite for issuance of Nigerian international passport.
Hence, legal and tax experts are already up in arms against the proposal, fuming that the idea was tantamount to breaching Nigerians’ fundamental human rights on freedom of movement, as quoted above, and insisting that all Nigerians, including minors and elderly who may have no tax compliance obligations, are entitled to the travel document.
Recall that Tunde Fowler, the executive chairman of the Federal Inland Revenue Service (FIRS), last Monday in Abuja, hinted that very soon, Nigerians might need to show evidence of tax payment before obtaining their international passports.
He stated this during the 136th meeting of the Joint Tax Board (JTB),which had as its theme: ‘Increased Inter-Agency Co-operation to Enhance Tax Compliance and Optimise Revenue Collection’.
Hear him: “We did take a position, and I believe it would be implemented in the very near future, that before you get any services from the Immigration Department — renewal of passports etc — you’d have to show that you are a tax payer.
These things are normal all over the world, in an effort to serve Nigerians and Nigeria better. People believe that payment of tax is a burden and I’ll repeat that you only pay tax on income and profits.
So if you reside in Nigeria and you are benefiting from being a Nigerian resident, it is only fair that you contribute to the system that makes you enjoy that standard of living.’’
But while dissecting the Federal Government’s plan for the citizens, Mr. Taiwo Oyedele,Partner/Head of Tax & Regulatory Service, Pricewaterhousecoopers (PwC) Nigeria, said:
”All forms of identification should be encouraged in Nigeria. I do not think it is right to make tax compliance a requirement for obtaining international passport especially because all Nigerians are entitled to it, including minors and elderly who may have no tax compliance obligations. Also some people require international passports for emergency situations such as medical treatment abroad.
”What should be done instead is to allow anyone who is eligible to get an international passport and then use the information about their travels as intelligence to crosscheck with their tax compliance information in order to query any apparent inconsistencies or non- disclosure.”
He used the occasion to correct the news making the rounds that FIRS has equally imposed Value Added Tax (VAT) on the document:
Issuance of passport is not a good or service that is liable to VAT as widely reported in the media,” he said.
Toeing the same line of thought, the Lead Director, Centre for Social Justice (CSJ), Eze Onyekpere, also picked holes in the government’s blanket approach to commence tax collection on each international passport procured or renewed irrespective of whether the applicants or holders have a means of livelihood or not.
He noted that insisting on such payment might be tantamount to breaching their fundamental human right on freedom of movement:
“As far as I’m concerned, anybody who has a means of livelihood should pay tax. Anyone who doesn’t shouldn’t pay. Procuring or renewing passport is part of the freedom to free movement because that is facilitated by an international passport. So, for someone who doesn’t have means of livelihood, you can’t impose tax on him because that is tantamount to denying him that freedom of movement. That’s my take on it”, he told Daily Sun on phone.
A Nigerian student studying overseas, Clara Okechukwu, noted that the VAT collection decision on international passport was not well thought out.
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Her words: “I’m a student. I don’t work. I don’t have any means of livelihood. My parents take care of me 100 per cent. They sent me to study overseas and they pay their taxes because their tax clearance papers were needed for me to get a visa. So, if that’s the case, why should I pay VAT to renew my passport? I can’t imagine myself paying that. Where will I get the money from. I’m entitled to freedom of movement please”.
But Chukwuemeka Eze, a tax expert and legal practitioner, approaches the issue from a different perspective. According to him, there are relevant provisions in the Personal Income Tax (Amendment) Act, 2011 that supports the infusion of income tax payment as precondition for enjoyment of certain social services, one of which is regarded by FIRS as issuance of international passport.
He explains: “International passport is issued by the Nigeria Immigration Service,which is a member of the Joint Tax Board (JTB). The resolutions of the JTB in the past two years betrays its resolve to employ every legal means to ensure tax compliance. There are relevant provisions in the Personal Income Tax (Amendment) Act, 2011 that supports the infusion of income tax payment as precondition for enjoyment of certain social services, one of which is regarded by FIRS as issuance of international passport. The government considers issuance of international passport, which is a property of the Federal Republic of Nigeria, as a privilege. This is arguable because some people consider the passport as an adjunct to the right to freedom of movement, which is a fundamental right under the Constitution. If obtaining a passport is presumed an element of the right to freedom of movement, an affected taxpayer will need to sue and pray the court for that kind of interpretation. Its implementation will be a tall order, but I expect an outcry at least in the short run.”
On his part, the President of the National Association of Nigerian Travel Agents (NANTA), Mr. Bankole Bernard, said the pronouncement by FIRS, is not only a burden on Nigerians, but has gone to show the level of insensitivity of the government towards the citizens.
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He said while government has not done anything to convince Nigerians that it was cutting its own spending to cushion the effect of the recession, all it does is to seek the understanding of Nigerians to inflict more pains on them.
Bankole argued that, in advanced economies, rich people pay more in taxes, but in Nigeria, he said, the situation is the reverse as rich people do all they can to evade taxes.
On the implication which such a new plan will have on the travelling public, he said the foreign exchange scarcity has shut in the number of travelers across all routes, leading to the exodus of foreign airlines and cut in the number of jobs available to Nigerians in the aviation sector.
He faulted the process leading to the pronouncement by FIRS, stressing that critical stakeholders were not consulted before the policy was announced.
This could possibly be a way of raising more fund for the government at the expense of rights of the citizenry.
Source: Sun News