Nigeria’s National Economic Council (NEC) has ruled out the possibility of increasing the Value Added Tax and other Corporate taxes by the Federal Government.
NEC yesterday after a meeting at the presidential villa Abuja presided over by Vice President Yemi Osinbajo agreed that any attempt to increase taxes including VAT would bring additional hardship to the citizens.
Briefing State House Correspondent after the meeting, minister of Budget and National Planning Senator Udoma Udo Udoma said government’s plan was to boost collection of taxes and ensure that defaulters are compelled to remit taxes in order to increase available revenue for funding of capital projects.
The Minister joined at the briefing by the Governor of Anambra Willi Obiano, Abdullahi Badaru of Jigawa State and the Lagos State governor Akinwumi Ambode. According to Senator Udoma total VAT collection in 2015 was about N1.23trillion. He said government target was to increase collection of VAT by at least 20 percent.
“We expect about 20 percent 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,” Udoma added.
Senator Udoma explained that giving the fall in crude oil prices which has affected the economy negatively, the Federal Government as projected in the 2015 budget will not cut any aspect of the capital budget. “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,” he added.
He further noted that “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 financing 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.
“In addition some of the capital projects, the various ministers for infrastructure are looking at how we can get private sector funding for some of them.
“For instance the airport can be concessioned, we are looking at public buy back for some of the roads, looking at tolls. 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 stressed.
Also speaking, the Governor of Anambra Obiano disclosed that NEC received report a presidential adhoc-committee headed by the Governor of Edo State Adams Oshiomole on some government agencies including the Nigerian Maritime Safety Agency that have been collecting revenues in foreign currencies but remitting in Naira.
He said that the Permanent Secretary in the Ministry of Finance briefed council that with the introduction of the Single Treasury Account (TSA) has assisted in resolving the problem.
The Anambra State Government also disclosed that Vice President Osinbajo directed that going forward, the Nigerian National Petroleum Corporation (NNPC) and other agencies must present their budgets for approval before spending in line with the TSA.
He said the Governor of Edo state updated council for approval on its findings that 81 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.
“Other revenue generating agencies woul also be forensically audited by SIAO, a local auditing firm. Council approved the engagement of the two auditing firms,” he added.
The Accountant-General of the Federal reported to council that the balance of $2.257billion was currently in the Excess Crude Account as at 31st December 2015.
Council was also briefed by the Governor of the Central Bank of Nigeria (CBN) Godwin Emiefele that about 23 states have benefited from the N10billion ECA soft loan from the Federal Government.
The Jigawa State government who spoke on the bailout issue said some states have not indicated interest while some are still in holding discussions with their banks.
He said that 28 States have also benefited from the presidential bailout for the States.