The apathy that surrounds the subject of taxation, fueled by the increase in levels of mistrust and non-confidence in leadership amongst the citizenry, is hindering effective tax generation, thereby restricting financial contributions to collective development. Although some of the mistrust surrounding taxation are justified, it is pertinent that the citizens know how government revenues are being generated and used to develop the various sectors of governance.
Financial literacy is crucial and important, as it allows the average salary earner to realise how best his/her income could be effectively managed. A lot of income earners generate their salaries, without adequate knowledge of how they are effectively expending their incomes on their expenses. Knowledge about the workings of tax is a pathway to attaining positive financial literacy, towards creating a balanced nexus of incomes in relation to their resultant expenditures.
Tax education is also important in fueling civic action toward promoting policies that would aid the progressiveness of tax schemes and regimes. Adequate education on revenue, tax and financial schemes would drive a surge in the enactment of more laws, legislations and policies that could aid tax development. A nation with a sizeable number of individuals versed in tax education is poised to be driven to tube their tax policies to be in line with the best global standard practices, thereby boosting their chances towards economic stability and development, is bound to have better chances than a country with a low number of individuals versed in the workings of tax.
The promotion of tax education also aids tax advocacy and activism, thereby driving tax literacy at the grassroots. This is evident in the impacts of tax and revenue organisations poised in spreading the gospels of tax. The emergence of tax debates, walks, capacity building sessions and seminars promoted by tax clubs and organisations in tertiary institutions is a testament to this fact. Many budding enthusiasts and professionals have been beneficiaries of these opportunities provided by these resultant effects of tax education, which has gone a long way in building their career paths and skills.
Accountability is necessary for governance and tax education is an effective way of ensuring that government finances are properly incurred and not laundered. Knowledge of the workings of essential taxes like the Personal Income Tax, Education Tax, Companies Income Tax, Capital Gains Tax, Value Added Tax, Withholding Tax and other taxes would ensure that citizens are on the lookout for how these taxes are expended and how they are spent on expenditure and budgetary allowances. Tax education would also go a long way in ensuring that corrupt public officials are brought to book on the occasion of tax and financial laundering, towards promoting transparency in governance and public administration.
Tax education could be a necessary panacea toward boosting decentralised sectors and entrepreneurship. Experts in taxation are bound to be knowledgeable in how taxes work, and how they could optimise their organisations to reap the full benefits of tax. Startups and unicorns could also spring up as a result of these innovations, which would go a long way in job creation, business optimisation and economic development.
However, tax education is fraught with challenges and problems. In a research conducted by the International Centre for Tax and Development (ICTD), low budget, tax apathy, low turn up and disinterest are identified as key challenges hindering tax education, especially in third world economies. However, if tax education is focused and simplified across all levels and boards, various sectors are bound to benefit from the effective dissemination of the workings of tax to the citizenry. Tax education is a pathway to effective income and revenue management, thereby boosting the chances for economic and financial innovation and development.
Adedimeji Quayyim Abdul-Hafeez can be reached via [email protected]
