How government plans to fund the proposed 2021 budget
Nigeria’s fiscal authorities outlined strategies for funding the proposed 2021 budget of N13.08 trillion during a public presentation, Tuesday.
During the presentation, the Minister of Finance, Zainab Ahmed unveiled six focus points that the government intends to use to generate the proposed N7.89 trillion revenue to fund the 2021 budget.
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To drive revenue generation and mobilisation, the government will:
· Focus on sustainability in revenue generation
· Enhance existing revenue streams and create new schemes
· Promote unity in the revenue ecosystem
· Promote cost optimization and liquidity enhancement
· Leverage technology and automation
· Put in place fiscal stimulus and concessionary loans
To optimise cost and enhance liquidity, a Tax Expenditure Statement (TES) will accompany the 2021 budget to the National Assembly and the purpose is to look into the cost of tax waivers and evaluate their policy effectiveness.
Also, annual ceilings will be set on tax expenditure to better manage how they affect already constrained government revenues.
To enhance existing revenue schemes, the government is targeting Government Owned Enterprises (GOEs) to optimise their potentials and revenue collection efficiency, and the president has directed that the cost-to-revenue ratio of GOEs would be at a maximum of 60-70 percent.
To further reduce costs, there would be an introduction of a N2.3 trillion stimulus focused on job-intensive projects as well as the provision of US$3.4 billion International Monetary Fund (IMF) emergency support to mitigate the effects of COVID-19.
Lastly, to leverage technology and automation, an Integrated Revenue Monitoring System (IRMS) would be created to ease revenue recognition.