ELON MUSK $11B TAX AND THE LESSONS FOR NIGERIAN GOVERNMENT IN 2022
Elon Musk 2021 Tax
Elon Musk is the CEO of Tesla and founder of SpaceX. He had on Monday December 20, 2021 tweeted hat he will be paying a tax amount of over 11 billion dollars in the year 2021. This amount when fully paid will represent the highest amount an individual has ever paid as tax in a single year.
In October 2021, Musk became the first person in the world to have a net worth greater than $300 billion and over the past several weeks, he has been selling millions of shares of his Tesla shares, earning billions of dollars more after asking his followers in a Twitter poll if he should sell 10% of his holdings. The response to that poll was a resounding “yes.”
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The emphasis on Musk’s income comes amid speculation of his past tax filings. In June, a ProPublica investigation found that while Musk’s wealth had grown by nearly $14 billion from 2014 to 2018, he paid $68,000 in federal income tax in 2015, $65,000 in 2017 and none in 2018. Between 2014 and 2018, the investigation found, he had a true tax rate of 3.27%. But here we are and Elon Musk is trying to set an all time tax record in 2021. It is simply impossible to bet against that man.
What has this got to do with Nigeria as a country then?
You may be asking what this has got to do with Nigeria or the Nigerian government, but before I tell you how this concerns Nigeria let me first provide a context here.
- The total tax revenue of the Federal Government of Nigeria in 2020 was 4.9 trillion naira according official report by FIRS – that amount represents 78% of Musk’s 2021 tax
- The $11 billion tax bill that Musk will pay is actually bigger than the aggregate personal income tax collected by the 36 states in Nigeria plus FCT in the past 5 years.
- The total VAT collected in Nigeria in 2020 is 1.53 trillion naira which represents about 25% of Elon Musk one year tax.
- This $11 billion tax also represents approximately 38% of the total federal government budget for 2022
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The Implication
As you can see, the tax paid by one man in America is more than the total tax a government with over 203 million people collected in a year. Now here is the point. To be rich as a nation the government must create the enabling environment for her citizens to prosper. A prosperous people is what gives birth to a prosperous nation. Your people can’t be poor and you expect to be rich as a country. And it is also not possible for your people to be in affluence and you as a nation be poor. And tax is the primary way government shares in the wealth and prosperity of its people and their enterprises.
Imagine if Nigeria can have just 10 of her citizens able to do 10% each of what Musk does yearly? And we are talking about a man who had his fortune jump by $33.8 billion to $304.2 billion on the first work day of 2022. Just think about it and see where we could have been as a country. In 2022 if Nigerian government aims to prosper they must be more sincere. Sincere in what aspect? Sincere in creating an enabling environment for businesses to thrive. If businesses thrive, individuals will succeed. If they fail to do this, I am afraid the borrowing will only increase.
Conclusion
The good news is that government can do this. It doesn’t take magic to create an enabling environment for business to thrive. It starts with the policies. Net is to be sincere with the implementation. Of course paying lip service to corruption will not help matters. But the real question is whether the government is willing? Are they even interested at all.
I believe that Nigeria can do this, and it indeed has all it takes to do it.