The Senate will reduce the import duties waivers proposed for the N19.76trillion 2023 budget with an attendant deficit of N12.4trillion.
The Chairman, Senate Committee on Finance, Sen. Solomon Adeola made this known in Abuja on Tuesday, at an interactive session on the says it will reduce the N6 trillion proposed as import waiver for companies in the 2023- 2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper(FSP) with revenue generating agencies.
Adeola said the reduction became necessary, given the projected deficit of N12.4 trillion in the 2023 budget estimates and the current dwindling revenue profile of the nation.
Adeola said a conscious effort must be made to reduce the growing budget deficits, adding that borrowing trends can not be allowed to continue unchecked.
He said there was an urgent need to look inward towards increased revenue generation and blocking of leakages.
“About six trillion was provided as a waiver for companies in the 2023 proposal, but we should reduce it by 50 percent.
“I don’t think we can accommodate that, we need to reduce the six trillion waivers by 50 percent,” Adeola said.
Adeola also urged the Ministry of Finance to place 63 Government Owned Enterprises (GOEs) on the cost of collection to fund their expenditures with immediate effect.
This, he said, would generate more revenue to fund the deficit envisaged in the 2023 budget.
According to him, placing the agencies on the cost of collection would spur the GOEs to collect more, because the more they generate, the more they receive.
Adeola also called for a review of pioneer legislation status on the tax of some companies in the last five years.
The Minister of Finance, Budget, and National Planning, Zainab Ahmed in her presentation on the overview of 2023-2025 MTEF/ FSP disclosed that the Federal Government revenue for 2023 was projected at N6.34 trillion.
According to her, N373.17 billion would be generated from oil sources, while the balance of N5.97trillion would be earned from non-oil sources.
She also said the budget deficit for 2023 was projected to be N12.41 trillion, while the federal government’s 2023 aggregate expenditures were projected to be N19.76 trillion.
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Responding to questions from senators, she said that it was the assumption of the government that fuel subsidy would be exited by June 2023.
She, however, expressed hope that the parliament would see a better way of ensuring exist of fuel subsidies.
She said the deficit envisaged in the budget was a concern and debt serving was consuming a chunk of the nation’s revenue.
Ahmed said there was a need to improve the revenue and reduce leakages inherent in the system.
“One of the ways to increase our revenue is to strengthen our monetary generating enterprises and to provide real sanctions to defaulters based on the fiscal responsibility act.
On issuing tax credits to some companies and waivers.
She said:” Tax credits are issued only when companies construct projects and the projects are certified and certificate issued by the Federal Ministry of Works.
She also said that some of the waivers are backed by laws enacted by the legislature, adding that a review of the waivers would require an amendment to such laws.
The Controller-General of Nigeria Customs Service(NCS) retired Col. Hamid Alli in his presentation said NCS was working on implementing the collection of telecommunication tax in 2023 to boost the nation’s revenue.
He said the NCS projected a target of N2.8 trillion revenue collection for 2023, N3.5trillon for 2024, and N3.75trillion for 2025.
The Chairman of Federal Inland Revenue Services (FIRS) Muhammad Nami, told the committee that tax credit was an important innovation of government that has yielded positive results from Sept 2019 when it was introduced through Executive order 007 by President Muhammadu Buhari
He urged the committee not to legislate against it as it was only given to companies with evidence of project execution.
He informed the committee that out of the N6.08trillion projected revenue from January to July 2022, FIRS generated N5.59trillion and assured that the N10.4trillion projected for the year, would be achieved.
Revenue generating agencies expected to appear at the five-day program to make a presentation on their revenue projections for the 2023-2025 MTEF-FSP includes the Central Bank of Nigeria,(CBN), the Nigeria Port Authority, Among others.
