FG mulls tax relief, fiscal instruments to revive economy

The Federal government has announced plans to roll out Fiscal roadmap that includes a number of measures around revenue mobilisation, tax relief and fiscal instruments that will be issued around 2017 to revive the economy.

Kemi Adeosun, Finance Minister and Chairman of the Federations Accounts Allocation Committee (FAAC) said most of the new measures would be focused on supporting rhe manufacturing sector in terms of tax relief and other measures.

“They have taken quite a hit and we will continue to try and support them through it. But I think the big challenge for manufacturers is Forex and high interest rates and I know the monetary policy is doing everything they can.” she stated.

This is even as  the Federal, State and Local Government Areas of Nigeria again managed to share N420 billion for the month of October, same figure shared the previous month amid dwindling oil revenue caused by decrease in crude oil export volume and drop of average price of Crude oil.

Adeosun who briefed reporters at the end of the FAAC  meeting cited decreases in volume of dutiable imports,  receipts from Joint Venture Cash Call, Foreign Companies Income Tax (CIT) and VAT and pipeline repairs and maintenance to the drop in revenue.

“The situation in the Niger Delta continues to affect us but we are working very hard to resolve it. We are confident that we will gather production volumes back up as quickly as possible.

“Of course the latest National Bureau of Statistics (NBS) figures are reflecting the ongoing challenges in the economy. If you look at the figures closely, the large driver of the lack of growth is the oil sector,” the minister said.

A breakdown of the Federal Account Allocation Committee meeting communique showed that from the Statutory Revenue distributable for the month, the Federal Government received N96.674 billion (52.68percent), states received N49.035 billion (26.72percent) while local government councils received N37.804 billion (20.60percent).
N66.836 billion gotten from Value Added Tax(VAT) was shared at 15 percent, 50 percent and 35 percent for federal, state and local governments respectively.

Adeosun said the sum of N6.330 billion was refunded by the Nigerian National Petroleum Corporation (NNPC) to the Federal Government adding that the excess crude account (ECA) now stands at $2.456 Billion dollars which shows a positive increase by $2 billion.

While a breakdown of the Value Added Tax (VAT) distribution for the month, showed that FG got N10.025 billion, whereas state government and LGAs got N33.418 billion and N23.393 billion respectively.

“You could see also in the revenues the fact that we had in August 950,000 barrels a day shut in. That is the largest source of our revenue and when it is challenged it is clearly been reflected in the numbers,” Areosum told reporters as she tried to explain the persisting drop in revenues.

“Now the situation is being addressed we are now seeing production volumes come back. We are confident that the progress will be continued,” she stated.
She also pointed out that a look at the figures shows that “there was growth in Agriculture and solid minerals which is very encouraging because we have said these are two of the sectors we want to focus on. Two of the sectors that we have invested in.
“Of course there is a lag between policy and result, but we are beginning to see signs of improvement in our normal revenues which is very encouraging. Remember one of the objectives of this Administration was to really reduce our dependency on oil by getting other sectors of the economy moving,” she said.
She expressed optimism that although it is still a long way to go that there is still an encouraging sign.
“I think the other thing is that the rate of contraction is actually slowing so in other words the speed at which the economy is declining is actually slowing down. That also for us is quite encouraging. We will continue to watch and look for areas where we need to provide far more fiscal stimulus to get growth back.
“Now it is clear from the figures that the manufacturing sector is the one that is really very challenged and the numbers around that, shows that one of the major challenges in the manufacturing sector is Forex availability.
“It is a major issue. I think that sector will benefit from more consistency of foreign exchange policy. I think that is clearly a factor.”