Showbiz personality, Punch columnist, Etcetera on his page
today discussed if Nigerian entertainers should pay tax and why many do not pay
at all. Continue to read his article…
For the record, this article is not meant to give
celebrities who don’t pay their taxes a pass. I think we all should pay what we
legally owe, including those whose work puts us on the big screen, the sports
field or in the recording studio. But I do have an understanding of the
multitude of reasons celebrities give for not paying tax. And I think you
should too.
The Nigerian tax system is totally messed up… yes, messed up
in all ramifications. I concur with the argument that monies generated from
taxes in Nigeria are not judiciously used by the government. Or we haven’t seen
what the money is being used for.
When singer and actress Lauryn Hill and other American
artistes pleaded guilty and even got incarcerated for tax evasion, a lot of you
must have asked: “Why can’t our celebrities pay taxes like their American
counterparts?”
But the real question is, how many Nigerians pay tax? As you
are reading this article, I can bet that you probably don’t know where the LIRS
or FIRS offices are in your local government.
So before you all jump on the
government-must-tax-Nigerian-entertainers bandwagon, a few important points are
worth noting.
Most Nigerian entertainers are evading tax, not because they
intentionally want to, but because they don’t know their taxable income. Likewise,
the Nigerian government, through all its tax agencies, is losing billions of
naira every year from the entertainment industry because they are yet to
discover a proper structure for taxation of the industry.
I know it seems like a great thing to take home a
million-naira plus pay cheque for singing a song, starring in a TV show or
making a movie. And I’m sure the financial perks and other benefits of stardom
aren’t lost on celebrities. But think for a moment about what it must be like
to get one or two big cheques a year (either lump sums, advances or royalties)
and then have to manage that money wisely all year long, maybe not knowing when
the next cheque will come in.
Most people in Nigeria are wage earners or businessmen and
women who get regular cheques once a month or daily money from their
businesses. Some employees in the oil sector might get paid twice a month.
Overall, the average person who’s working can count on a pretty steady pay
cycle. But that’s not the case with entertainers. Sure, they get their paydays
– big ones, in fact. But when they get paid, it’s like receiving a huge
financial windfall. And we all know what happens with most windfalls. They blow
the money. Despite all the bling and the perceived glamour that come with being
a celeb, the truth is that it’s tough being a celebrity and keeping your
finances straight.
There’s also the issue of financial oversight. Most naija
celebs don’t know what to do with their money when they get paid for gigs or
appearances. Some have gone broke for trusting the wrong people to handle their
money or to give them financial advice, that’s why a lot of artists who once
lived comfortably have pretty much kissed their riches goodbye.
Being a celebrity anywhere in the world means you’re
constantly in the spotlight. That additional scrutiny doesn’t just come from
the public or the media. Celebrities, with their “I’m-living-large” lifestyles
and their out-sized pay cheques, are also prime targets of fraudsters.
In fact, if you’re a public figure who is routinely taking
home cheques in the six, seven and eight figures range, you have pretty much
put a bull’s eye on your back when it comes to the tax collectors. Simply put,
the tax authorities in Nigeria know they cannot make an example out of
celebrities for tax evasion. Nigerians generally don’t believe in paying tax
and coupled with corruption in the system, it is hard convincing a Nigerian to
remit a chunk of his or her earnings as tax to a corrupt government.
So you cannot bash naija celebs for non-payment of tax
without taking certain factors into consideration, because that would be a case
of the pot calling the kettle black. Have you paid your tax? I can bet that
even the tax collectors in Nigeria don’t pay their tax. Saying that millions of
Nigerians are enjoying some kind of financial Christmas – in the form of tax
evasion – would be an understatement. So why should we expect celebrities to be
any different simply because their cheques are bigger? It doesn’t work that
way. Their expenses are bigger too, in many cases way bigger than most people
can imagine.
Also, unlike the average employee, celebrities don’t have
taxes automatically taken out of their pay cheques. The corruption in the
Nigerian tax system has got so bad that even the workers having taxes automatically
taken out of their pay cheques have cried out that their taxes are not being
remitted as claimed by their employers. And the tax agencies are not doing
enough to rectify the decay in the system. And someone is screaming that the
government should start taxing entertainers? Tell the average Nigerian that he
or she has been mandated by the law to pay tax and you will have yourself a
barrage of insults to deal with. Yes, it is that bad. If the government does a
thorough manhunt for tax offenders, even you who are reading this article right
now will perhaps get in trouble with the law.
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