, Kwara GDP Size and the Utility of Tax by Sulaiman O. Yusuf, -

Kwara GDP Size and the Utility of Tax by Sulaiman O. Yusuf,

Using Tax as local economy stimulant

Gross Domestic Product (GDP) is used to measure the size of an economy. That is, the monetary value of goods and services produced by a country/state during a specific period.

Tax is like umbilical cord that connects the people to their government. It is a powerful fiscal tool for wealth redistribution.

The overbearing reliance of governments on Federal Allocations and the lack of concentration in developing productive activities that are necessary for meaningful growth is a bane to Kwara development.

Kwara state, at creation, was fast growing geometrically with bold blueprint through Kwara state first development plan. In the past, Kwara could boast of companies like Okin foam/biscuits, Kwara paper converter, Tate industries, Patigi Rice mill, Union steel industry amongst several other companies. Their death which was caused by poor National Economy policies of the Federal Government, without cushioning economy policies from the state governments. Hence, the high rates of unemployment, low per capita income and drop in Kwara GDP, overtime.

The utility of tax goes beyond its revenue potential. Financial commitment of the people in the form of tax to empower the government they democratically and voluntarily elect should be symbolized. In turn, the government must prudently manage the resources and account for the stewardship of same to the people. This is a moral and ethical obligation on the government.

Recently, tax is no longer seen as alien culture. The revival of taxation has been somewhat embraced by the people, although a decline in compliance over the years. Therefore, Kwara state government must sustain people’s trust by developing productive activities for the people to earn from and pay tax.

It is popular among every government to provide people with cash and working tools in the form of empowerment. This culture has been more politically motivated than economically motivated. Technically, giving people more cash outside the economic system will create inflation and also take people away from goods and services production.

The utility of tax to stimulate Kwara economy and increase the GDP can be in the following ways;

1- Invest heavily in infrastructures. Roads to investment opportunities in the state should be given utmost priority. Real investments will come from local investors. The companies will pay taxes and also serve as tax agent to Kwara Internal Revenue Service.

2- Head hunt talents in creative arts, technologies and entertainment. Provide platforms and clusters for them to interact and exchange ideas that will propel and transform their talents to business. They will pay tax when their talents are commercialized.

3- Leverage on the ease of administering Personal Income Tax (PIT) with informal sector. Involve trade associations in economy policies, they will willingly pay tax when they know the efforts of the government for their businesses to thrive.

4- Create and deploy single window system to facilitate trade and tax collection.

5- Employ and contract indigenous ICT experts that will localize applications that can locate remote workers. COVID-19 has created more remote workers.

6- Lastly, communicate with taxpayers on a periodic basis to sustain their trust and civic responsibilities in government by paying tax. Information alone does not do Justice.

a Tourism Expert and a budding Tax Practitioner.

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