By Umar Ardo, Ph.D
No matter what our latter day professional economists would say, high taxes and subsidies removal are bad for our economy and the wellbeing of our people. In a democratic society like ours, the main essence of government is ensuring the security and well-being of citizens. This basically means protecting citizens’ lives and property, and providing necessary services including subsidies on essential commodities such as petroleum, electricity, fertilizers, pharmaceuticals, food products, housing, etc. The government is also entrusted with the duty of collecting taxes from citizens in order to fund these essential public services and infrastructure. However, when this system is manipulated and citizens are overburdened with high taxes and removal of subsidies on such essential items the proceeds of which end up being misused or stolen by corrupt officials, the repercussions always turn out to be severe.
One of the primary disadvantages of overburdening citizens with high taxes and removing subsidies on essential commodities is the impact it can have on the cost of living. As clearly demonstrated under the present situation in Nigeria, high taxes and removal of subsidies have led to sharp increases in prices across board especially for basic necessities, making it difficult for ordinary citizens to afford living decent lives; resulting in sharp decline in living standards, an increase in poverty level and widening wealth gap between rich and poor citizens within society.
Another observable primary disadvantage of overburdening citizens with high taxes is the negative impact it creates on the economy. High taxes are stifling economic growth and discouraging investment and innovation, as individuals and businesses are left with less disposable income to spend and reinvest in the economy; invariably leading to a decrease in consumer spending, a slowdown in business expansion, and ultimately, a decline in overall economic prosperity.
Furthermore, if the funds generated from these high taxes and removal of subsidies are misappropriated by corrupt officials, the consequences will be twofold. First, not only will citizens forced to bear the burden of increased costs without the benefit of subsidies, as it is the case presently of Nigerians, but they will also be deprived of public services and infrastructure that these funds were intended to support. This is leading to a breakdown in social cohesion, a loss of faith in the government, and a sense of injustice and resentment among the population.
Second, if taxes are misused or stolen by corrupt officials, the trust between the government and its citizens is eroded. This can lead to widespread disillusionment and apathy among the populace, as it will feel that its hard-earned money is being squandered or used for personal gain of public officials rather than for collective good. This lack of trust can undermine the legitimacy of the government and weaken the social contract that is essential for a functioning democracy.
Moreover, the misallocation of funds generated from high taxes and removal of subsidies can also have further serious implications for economic development and growth. When resources that should be invested in critical sectors such as healthcare, education, and infrastructure are diverted for personal gain, the long-term prosperity of the country is jeopardized. This can hinder progress, impede innovation and perpetuate a cycle of underdevelopment that will be difficult to overcome.
In conclusion, overburdening citizens with high taxes and removal of subsidies on essential commodities, and the misappropriation of generated funds by corrupt officials pose significant disadvantages and dangers for a democratic society like ours. It is leading to increased hardship for the populace, undermining trust in the government and hindering economic growth and development. Under this circumstance, therefore, it is crucial for the Tinubu government to uphold transparency, accountability and integrity in financial management to ensure that the welfare of citizens is prioritized and the public good is safeguarded if it must retain the trust and confidence of Nigerians.
