Lagos got me today. The traffic was legendary – call it Traffic Monday which has become a norm every Monday. To meet an appointment to a client who arrived yesterday from Japan, I had to jump into okada when it became clear the taxi could not get me to the destination on time. Taxi was slow, Marwa was not helpful but okada saved the day. I did not believe it but that was it – moving fast, meandering across the traffic to beat the clock!
People, we need a real solution to Lagos traffic. Traveling from local airport to Victoria Island was taking four hours. That should not have taken more than 46 minutes. It was crazy.
I propose for Lagos state government to begin immediate discussions with neighboring states to move some of the business hubs therein. Do not bank on that though, as doing so will mean that Lagos will lose some tax revenues to the states. So, for Lagos state government, that would not be a good idea, even though it may help the region!
Yet, what we have in Lagos is not sustainable – this city will crash under severe traffic, in ten years, if nothing strategic is done. The Atlantic City should have been built in Ogun State to re-distribute traffic from the Island to the Mainland. All that Lagos State needs to do is to work out a tax revenue sharing formula with the neighboring states.
But that is easier said than done since Nigerian law is still primitive in that space on where earnings or incomes are taxed. Afterall, Nasarawa State houses most people that work in Abuja, and most of those Abuja workers living in Nasarawa state do not pay taxes to Nasarawa state government.
That is why I have pushed for a new tax policy in Nigeria: have a tax system that stimulates local participation and innovation. A situation where you live in one state and pays 100% of your state to another state where you are employed in faulty. Perhaps your kids attend the local schools where you live, and yet you are not contributing anything in that local economy’s revenue. Today, Nasarawa state poorer citizens are carrying the loads of many richer Abuja workers. It needs to change.
Inability to effectively collect online tax may not look like a threat today but as more business systems move online, new models for tax collection including online tax would become critical. Whenever you pay that Guardian Newspaper advert, you have to send that VAT money. But since you have been paying for the Facebook and Google adverts, nothing like that has happened. It should be a concern because even though we do most things online, we still exist in the physical world where government needs resources to provide social services.
Certainly, we need a new model on tax collection and that would require new tools and processes. We cannot allow the web to destroy the value associated with tax even as it continues to redesign the structures of many other areas. Nigeria desperately needs innovation on online tax collection.
If we have a system that balances where you work and where you pay tax, the promise of getting Lagos State and neighboring states to work out how to shift some firms from Lagos state to say Ogun state may become tax-possible.
As those companies move, the traffic will follow. But it is possible the companies will not make the calls unless governments facilitate the exodus through incentives. Today, any government that does that would be seen as careless in an era where state governments continue to work hard to attract new firms: for instance, no Lagos state governor would like to be remembered as the person asking existing Lagos companies to move to other states, even if to save Lagos from traffic armageddon. When you examine all the elements, you would agree that only a federal change in our tax code would fix the paralysis.---