A disclosure the other day by the Federal Inland Revenue Service (FIRS) boss about possible pursuit of 85,000 millionaire tax defaulters is curious and unfortunate. There is no reason for serious alarm before such a critical service can be delivered and the reasons are not too far to seek. Tax payment to governments by qualified individuals and corporate organisations, has been a feature of both the ancient and modern world. It is generally recognised as a civic duty or responsibility through which governments gather revenue/financial resources with which the machinery of state and the common needs of the people are satisfied. Essentially, payment of tax is important for governments and their institutions to survive and serve the needs of the people. Every qualified taxpayer ought to know and comply with this basic need of paying due tax. And so, the other day, a report that the Federal Inland Revenue Services (FIRS) was seeking help from and collaboration with other stakeholders like the Nigeria Police Force (NPF), to catch-up with “wealthy tax defaulters” to cause them to fulfil their tax obligations, sounded unthinkable that the wealthy in our midst could be fingered as part of tax defaulters in the country. Despite having been rewarded with wealth through their various undertakings and endeavours, the little they are ordinarily expected to do is to support the machinery of the government and the welfare of the people. No one expected them to fail to pay their taxes. To have chosen to default in their tax obligations is to say the least the highest level of ingratitude and no doubt, irresponsibility. According to the report, out of the N5.32 trillion tax revenue FIRS achieved in 2018, about N2.3 billion was recovered from 45,000 “wealthy tax defaulters.” Against this development, FIRS plans to go “after another set of over 40,000 millionaire tax defaulters in 2019.” It is necessary to observe that FIRS claimed to have been scrutinising accounts of banks’ customers for the purpose of its tax revenue generation. Indeed, there have been reports that the apex tax agency has engaged in placing liens on bank accounts of suspected tax defaulters. Placement of such liens means that the affected bank customers will be unable to have access, in part or whole, to their account balances until they resolve whatever the issues may be with FIRS. In other words, affected bank customers will not be able to make withdrawals until they settle tax liabilities dictated by FIRS. It is, therefore, obvious that FIRS, in its tax revenue drive, is using coercive method to compel individuals and organisations to pay tax. This is curious in the polity. While tax revenue, like other revenue sources open to governments, is essential for the government to be able to carry out its duties and responsibilities in the interest of the citizenry, there is hardly any doubt that FIRS must ensure that whatever method it has adopted or plans to adopt in pursuit of suspected tax evaders is in line with subsisting legal and regulatory provisions. This is even more exigent if the tax agency has to pass through the banks in its recovery of tax debts. It should be noted that banks, as custodians of public and private funds, have obligations to their customers, especially with regard to confidentiality of transactions. So, any attempt or indeed breach of this near-sacred and long-established understanding between banks and their customers, (outside what is permitted by law) has implications not just for the banks but also the larger economy. As is well known, the Central Bank of Nigeria (CBN) always laments that the amount of money outside the banking system is very high. In spite of CBN’s efforts to bring much of the money outside into the banking system, successes recorded are yet to change the situation significantly. Consequently, effectiveness of monetary policies has remained impaired. And this is not in the best interest of the economy. On the other hand, banking institutions are having their own challenges – rising bad debts, poor liquidity, fraud, money laundering, etc). It is foreseeable that FIRS’ debt recovery approach will send signals -right or wrong- to customers of banks. One such signal may be that it is no longer safe for persons to keep their money in banks, without intrusion by third parties. When such happens, customers, who ordinarily have multiplicity of choices, will begin to consider alternatives to safekeeping and safe-guarding as well as utilisation of their funds. Consequently, more funds will find their way outside banks. If this country returns to a situation where banks’ customers avoid or minimise using the banking system, the first casualties will be the banks. Their deposit portfolio will significantly decrease and with very high debt levels in banks already, an invitation to banks’ distress will, knowingly or otherwise, have been made. If the situation reaches a critical state where many banks may become distressed, Nigerians and their government will most certainly begin to place side by side tax debt recovery vis-a-vis banks’ distress to decide which, among the two, should be placed on hold. Therefore, for FIRS to continue or commence its intended incursion into the banking industry for the purposes of recovering tax revenues outstanding against the wealthy, it is imperative that both the regulators of the banking system and operators, at the highest level of decision-making, must properly and effectively engage themselves, prior to embarking on this explosive venture. There is the need to thoroughly consider and abide by legal and regulatory provisions. Proper planning and setting up of implementation procedures as well as consistent public awareness and/or orientation are important. In all respects, arbitrariness, high handedness and breach of relevant subsisting laws and regulations must be eschewed. So, in the main, tax payment is a worldwide legitimate and civic responsibility of persons who are not exempted (for varying reasons) from such payments. Therefore, every tax liable person has a responsibility to meet such liability without waiting for the tax man’s knock on the door. Whether
