Business

FG Plans More Taxes To Reduce Debt Burden

Published

1 month ago

October 19, 2022

The collection of more taxes and effective blocking of revenue leakages remained the best measures that would drastically cut external borrowing and reduce the high debt burden of Nigeria, the Federal Government said, yesterday.
The government, however, said the debt burden was not beyond what it could effectively handle.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, represented by the Director (Technical Services), Fatima Hayatu, canvassed these views at a workshop on tax expenditure organised by the Economic Community of West African States Commission under the context of the Implementation of the Support Programme for Tax Transition in West Africa in Abuja.
The event was aimed at examining directives on harmonisation of tax expenditure management practices and the monitoring and evaluation of tax transition in ECOWAS member-states.
The minister said the issue of tax expenditure was of a great concern for the government.
The government had in July said the country’s debt service cost in the first quarter (Q1) 2022 was N1.94trillion, N310billion higher than the actual revenue received during the period indicating that Nigeria’s debt service cost presently outweighs its revenue.
Ahmed said, “If we have more taxes and redirect the taxes to the right fiscal sectors of our economy, we will reduce our debt burden. It is not as if the debt is beyond what the government can handle. If you look at the ratio of the debt to the Gross Domestic Product, I think the government is doing well.
“The debt is not something that cannot surmounted. The programme is to block leakages where the taxes are being diverted. So, if we block leakages, and if it is transparent, Nigeria will borrow less and we will have more money to finance other sectors.”
While informing that reforms in tax expenditure management were gaining traction in Nigeria, she observed that the development had resulted in the continuous development of in-house capabilities and internal restructuring in agencies for greater efficiency.
Ahmed also said that government would commence the rationalisation of tax exemptions by phasing out antiquated pioneers and other tax incentives for matured industries.
According to her, contrary to what was obtained in the past, the country is presently reaping the benefits of tax exemptions and concessions given to small businesses.
She said, “A lot has changed, the system is more transparent and tax expenditure that government has given which is tax for bond is to encourage ailing and infant industries to be able to do more and employ more youth.
“I am glad to say that the tax expenditure that federal government has been given has encouraged industries and manufacturers to stay afloat even with the COVID-19 pandemic and also to say that they have been able to keep their staff. That, to us, is an achievement because we don’t want people to loose their jobs which would reduce the insecurity we are facing.”
Ahmed said Nigeria was committed to strengthening transparency in its public financial management towards the drive to boost domestic resource mobilisation.
The Head (Corporations), European Union for Nigeria and ECOWAS, Cecile Tassin-Pelzer, lamented the ratio of tax to GDP in the West African region, describing it as low.
While stressing the need for ECOWAS member-states to effectively mobilise more taxes to offset the potential decline in revenues, she observed that domestic revenue is an important source of government expenditure funding, but revenue mobilisation remains a critical challenge in the region.
Tassin-Pelzer said, “The global economic challenges resulting from the COVID-19 pandemic and the invasion of Ukraine by Russia have affected economic opportunities of countries and individuals. West Africa is no exception. In fact, one can argue that the impacts of these challenges are felt even higher in this region than in so many others.
“Efficient management of internal taxation for improved revenue generation cannot be over emphasized. As we all know, the tax to GDP ratio in this region is too low and, and our host country, Nigeria, is one of the lowest in the world. Therefore, it is important for the region to get the tools required for a proper monitoring and evaluation of the taxes.”
The Director (Customs Union and Taxation), SalifouTiemtore, called on the Federal Inland Revenue Service to deploy adequate resources for collection of more tax than the custom administration in order to mitigate the loss of revenue due to stain of liberalisation of the region’s economy.
He said the PATF programme would strengthen regional fight against fraud, tax evasion, Illicit Financial Flows and other forms of corruption.
Tiemtore said, “We need to know what government is paying as incentives or any type of exemptions they are giving to investors. If assess and quantified properly, it will give us an idea what government could get as revenue if such activities are not exempted from tax.
“We are also looking at fiscal transition. In the world right now because we are dismantling custom tariff and also looking at the liberalisation of our economy. What this means is that we are dismantling custom tariff which automatically means a loss of revenue from custom tax. We need to strengthen our domestic tax administration so that we will able to collect more money. FIRS, therefore, have to collect more tax than the custom administration to mitigate the loss of revenue due to stain of liberalisation of our economy.”

Business

FG, States, LGAs Share N736.782bn In Oct

Published

2 days ago

November 25, 2022

The Tide

The Federation Account Allocation Committee (FAAC) has disbursed N736.782 billion from October 2022 Federation Account Revenue to the Federal Government, States and Local Government Councils.
This amount was augmented by an additional N70 billion distributed to the three tiers of government.
Federal Government received N36.876 billion, States got N18.704 billion, Local Government Councils received N14.420 billion.
An extra N30 billion Augmentation was made from non-oil revenue and distributed, with Federal Government getting N15.804 billion, States getting N8.016 billion, and Local Government Councils getting N6.180 billion.
According to the communiqué at the end of the FAAC, at the meeting for November 2022, the N736.782 billion total distributable revenue was made up of N417.724 billion distributable statutory revenue; N213.283 billion Value Added Tax (VAT) revenue; N5.775 billion Exchange Gain revenue.
In October 2022, the total deductions for cost of collection amounted to N33.555 billion and total deductions for transfers, savings and refunds was N186.749 billion.
The balance in the Excess Crude Account (ECA) still remains at $472,513.64.
The communiqué confirmed that from the total distributable revenue of N736.782 billion, the Federal Government received N293.955 billion, the State Governments received N239.512 billion and the Local Government Councils received N177.086 billion.
The total sum of N26.228 billion was shared to the relevant States as 13 percent derivation revenue.
Gross statutory revenue of N622.270 billion was received for the month of October 2022. This was lower than the sum of N825.710 billion received in the previous month by N203.440 billion.
From the N417.724 billion distributable statutory revenue, the Federal Government received N206.576 billion, the State Governments received N104.778 billion and the Local Government Councils received N80.779 billion. The sum of N25.591 billion was shared to the relevant States as 13 percent derivation revenue.
For the month of October 2022, the gross revenue available from the Value Added Tax (VAT) was N229.041 billion. This was higher than the N203.960 billion available in the month of September 2022 by N25.081billion.
The Federal Government received N31.992 billion, the State Governments received N106.642 billion and the Local Government Councils received N74.649 billion from the N213.283 billion distributable Value Added Tax (VAT) revenue.
The N5.775 billion from the Exchange Gain revenue was distributed as follows: the Federal Government received N2.707 billion, the State Governments received N1.373 billion, the Local Government Councils received N1.058 billion and the relevant States received N0.637 billion as 13 percent derivation revenue.
According to the Communiqué, in the month of October 2022, Value Added Tax (VAT) and Companies Income Tax (CIT) increased significantly while oil and gas royalties, Petroleum Profit Tax (PPT) and Import Duty recorded considerable decreases.

Business

$1bn Looted Funds Recovered Since 2015 – Malami

Published

2 days ago

November 25, 2022

The Tide

Nigeria’s Attorney-General and Minister of Justice, Abubakar Malami, has revealed that the current administration has so far recovered about $1 billion looted funds till date.
Malami disclosed this while briefing State House Correspondents after the week’s Federal Executive Council (FEC) meeting presided over by President Buhari at the Presidential Villa, Abuja.
He also disclosed that Council has approved a new Anti-corruption Strategy Document to strengthen anti-graft campaigns in the country.
He said the recovered assets had been deployed to various sectors of the economy, including poverty alleviation.
Malami also expressed government’s concern over cases of budget padding, which he described as worrisome, noting that every necessary measure would be explored to address it.
Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar Farouq, had blamed the Minister of Finance, Budget and National Planning, Zainab Ahmed, for adding N206bn to the Humanitarian Affairs Ministry’s budget.

Business

Nigeria Loses $2bn To Oil Theft In Eight Months

Published

2 days ago

November 25, 2022

The Tide

The ad-hoc committee set up by the Senate to investigate oil theft and consequent damage on the nation’s economy has said Nigeria lost $2 billion (an equivalent of N1.3trillion) to oil theft between January and August this year.
The committee’s report, which was adopted by the Senate in plenary on Tuesday, made far-reaching recommendations for stemming the tide.
It, however, failed to name a single person or corporate entity carrying out the oil theft.
In one of its findings, the committee said, “Nigeria lost over $2bn to oil theft between January and August 2022, with consequent loss of revenue that would support the country’s fiscal deficits and budget implementation.”
The report indicated concerted efforts being made against the crime by all stakeholders, saying that they had started yielding results, with Forcados Terminal now producing 500,000 barrels per day as against zero production in the first six months of the year.
“Bonny Terminals was also producing 87,000 barrels of oil per day now as against zero production a couple of months ago due to activities of economic saboteurs”, the report stated.
The 16-point recommendations of the committee as adopted by the Senate stated in part: “ the Nigerian National Petroleum Company Limited should stop undermining Nigerian Upstream Petroleum Regulatory Commission and Nigerian Midstream and Downstream Petroleum Regulatory Authority from performing their functions.
“The provisions of the Petroleum Industry Act should be adhered to by NNPCL as regards functions of the established agencies.”
The report called for an immediate streamlining of agencies present at the terminals in line with the relevance of their PIA-delineated upstream and midstream/downstream statutory functions.
According to the report, the NUPRC should fast-track the upgrade of the National Production Monitoring Systems to enable real-time monitoring of flow station and terminal activities.
The NUPRC should expedite the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for the detection and mitigation of illegal movement of vessels to ensure adequate revenue generation and optimal crude oil production, it stated further.
It continued that the Bureau of Public Procurement should expedite all processes of procurement for NUPRC to ensure immediate deployment of an online real-time monitoring system by the commission across all upstream oil and gas production platforms for accuracy in measuring production volume by producers.
The report further said the NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria, including integrated ones, crude oil pipelines, issuance of loading clearance, and processing of export permits in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.
It also faulted what it called undue interference of the Minister of State in the operations of NUPRC as shown with letters made available to it by the agency, stressing that both the minister and NNPCL should allow PIA to function.
“The PIA as signed into law by the President, must be allowed to function by all stakeholders in the sector as an amendment on it now, will send wrong signals to the International community”, it stated.
Recall that the Senate on April 14, 2022, constituted a 13- member Ad – Hoc Committee on Oil Lifting, Theft, and the impact on Petroleum Production and Oil Revenues under the chairmanship of Senator Akpan Bassey, who is also the chairman, of the Senate Committee on Petroleum ( Upstream).