By Dr. Samson Abanni
Some needs when delayed disappear. in the light of the economic challenges, it may be more advisable to return to cash as much as possible. Cash is not easily taxed. Let me put it in a better way. The financial system is one of the best systems used to collect rent because it’s easy to setup digital check points to collect fees. A single transfer of N50,000 can bounce around the country 100 times or more in 24 hours and each time, it will be taxed. And of course, we are seeing it in bank profits.
Also, it’s easier to spend money when it’s not cash. You don’t feel the pain of the loss of hard earned money, so you spend more and the psychology is well known which is why there’s a massive push for adoption of digital payment systems-it’s easily policed and it is easier to collect rent. Account maintenance fees are rents you pay to economic elites who own these systems of rent collection and the federal government.
Unlike platforms like piggyvest which pays you for holding your money and encourage you not to spend, banks are more or less paid for keeping your money. When we spend more via cash, we delay gratification more, and when needs are delayed in many cases, they disappear.
You pay bank to keep the money. They use it to make more money. Then you pay POS, federal government for VAT and electronic transfer levy, and bank to withdraw the money. You also pay for sms to be told of the transaction.
There are so many checkpoints where your electronic money is being made to pay “fees” before moving on, and because it’s digital, we don’t feel it. Every important stakeholder has his interests covered except the ordinary people.
Let’s take a look at the journey of a certain N50,000. Immediately a man received his salary of N100,000, he sends N50,000 to his landlord to complete his rent. The landlord sends it to his child in school, who uses it to pay for two shoes. The vendor sends to his girlfriend who buys a wig from someone who borrows it to his sister via transfer and its journey continues, within 24 hours, that N50,000 can crisscross the country a thousand times, crossing different bank borders in 20 states. Each time, that money is taxed differently by different digital checkpoints.
So, the same N50,000, before it’s done with its rounds, can generate a good part of N50,000 as profit for the financial stakeholders.
Abanni is a Medical Doctor and Member of the Board of Editors of Pacesetter Frontier Magazine.