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FG projects 20% increase in VAT collection for 2016

tax

Federal Government anticipates a 20% increase in the collection of Value Added Tax (VAT) this year, to plug the country’s revenue gap due to the impact of falling crude oil prices, Minister of Budget and National Planning,Udoma Udo Udoma said Thursday.

Federal Government does not intend to increase taxes thereby imposing additional burdens on Nigerians the minister said adding that the effort would be geared mostly towards ensuring cooperate bodies remit taxes.

The increase, which is meant to shore up revenue for the funding of the 2016 budget, he said is a conservative projection as the government intends to exceed this target. VAT collection for the
country stood at N1.23trillion last year.

Briefing journalists after the Monthly National Economic Council (NEC) meeting Udoma alongside the governors of Lagos, Anambra and Jigawa, said “We expect about 20% increase in VAT collection, which is conservative interns of our revenue projections. We are expecting much more than that. Occasionally we try to be conserved”.

He said to finance the 2016 budget which is currently before the National Assembly, the government is also planning to cut its oil joint venture cash call spending of about N1trillion annually rather than cut any of its capital projects.

“With reference to the budget, one thing we are determined not to do is to cut any of those capital projects, because we need them to stimulate the economy. We are going to work with the National Assembly, to see how we can get savings. One of the areas we are looking at is our cash call elements.

“ The minister of state for petroleum is looking at how we can cut our cash call elements which is about N1trillion by innovative financing. So he is discussing with some oil companies and looking for some innovative financing which might pick up some of the financings so that we reduce our financial output and contribution by the federal government, that will be a major saving which can be used to plug the gap particularly with falling oil prices” he said.

To fund the capital projects, he said the various ministers for infrastructure are looking at getting private sector funding, with plans to concession the airports and toll the roads. “We have to be imaginative. But it is important not to touch the capital portion because that is important to revitalise the economy to get our people back to work, to get growth moving again so that we can get the 4% growth” he added.

Accountant-General of the Federation reported to the Council that the balance of the Excess Crude Account as at 31st December 2015 stood at $2,257billion.

The council also received a report on some agencies of the Federal Government, collecting revenue in foreign currencies but remitting in local currencies to the federation account. Permanent Secretary, Ministry of Finance, Mahmoud Dutse, reported to council that, apart from NNPC, NIMASA and Port Authority, other agencies involved in revenue-generating are FIRS, Shippers Council, Airport Authority and Nigerian Immigration Service. He reported that the introduction of TSA has now resolved the problem as all accounts are under the control of
the CBN.

The Vice President reiterated FG’s policy that NNPC and other agencies must present their budget for approval before spending in line with TSA.

The Ad-hoc Committee which was chaired by the Edo State Governor, Adams Oshiomole, submitted a memo to the Council for approval on its findings 18 government revenue generating agencies were identified for forensic auditing. 18 core revenue generating agencies like NNPC would be audited by KPMG, an international audit firm while other non-core revenue generating agencies would also be forensically audited by SIAO a local auditing firm.

The council also received an update on states that have benefitted from the bailout funds. 23 States have benefited from the N10 billion each ECA-backed soft loan while some states have not indicated interest and some are still holding discussions with their banks. 28 States have benefited from the Presidential bailout.

 

Elizabeth Archibong