2024 budget: Finance minister rules out increase in taxes
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun has ruled out the possibility of an increment in tax rates in the country.
Speaking during an interactive session with Mr Abubakar Kabir Bichi led the House of Representatives committee on Finance, he said rather than increase taxes, his ministry would emphasize revenue generation in the 2024 financial year.
The interactive session between the committee, the Minister, and government-owned enterprises (GOEs) was aimed at shoring up revenue generation above the projected N27.5 trillion for the 2024 budget.
The minister who fielded questions from members of the committee maintained that it would be counterproductive to increase taxes since there is the need to attract both local and foreign investors to the country.
He noted: “You did say that there is a plan for taxation increase. I would say there is no plan for increase in tax rates as such. There is a plan for increasing the revenue from taxation. It is to increase tax returns, tax revenue as a percentage of GDP from around nine percent within three years to 18 percent which is closer to the African average.
“So the emphasis is on collections, not on increasing the tax rates. It is increasing the efficiency of tax administration, particularly collection.
“In a movement that is depending on investment as you mentioned foreign investment, including domestic investment, is depending on private sector investment to grow the economy, create jobs and reduce poverty, the intention would be where possible to even reduce taxes to allow people to have more money to invest in job creation and production. It is important to make that clear.”
The Minister who acknowledged that government spending on key infrastructure and social services like education, health remains inadequate stressed the need stressed the need to cut wastages and leakages in government expenditures.
The Minister who stressed the need for accountability in income generated from oil proceeds remarked that the 2024 budget estimates remains reasonable in view from estimates from oil production, exchange rates and borrowings.
This is as the Committee and the Nigeria Customs Service (NCS) have resolved to increase the 2024 revenue target of the service to N6 trillion against the initial N5 trillion targeted revenue for the year 2024.
Bichi pleaded with the Comptroller General of NCS, Mr. Adewale Adeniyi, to explore the possibility of increment of the targeted N5 trillion based on the need to actualize the renewed hope agenda of President Bola Tinubu.
He said the 2024 appropriation bill as presented by the president was laudable, adding that it would only materialize if there was enough money to meet the N27.5 trillion proposal.
The NCS chief remarked that a revenue generation of N6 trillion in revenue in 2024 is possible.
He said that is dependent on the review of the issue surrounding concession grants in 2024.
“If we can get N1.8 trillion in one year, that shows the N6 trillion revenue for 2024 is achievable,” he said.
He said many of the goods at the ports were yet to be cleared, adding that when the NCS looked into its system, a number of bills were not opened.
He said that when an internal audit was conducted, it showed that the NCS realized over N11 billion from that exercise, adding that there were still a lot of goods yet to be cleared.
He said in 2023, the service lost N1.8 trillion to the Import Duty Exception Certificate (IDEC), adding that in 2023, excise accounted for 18 percent of total revenue.
He noted: “In terms of the possibility of N6 trillion, I agree very much with you this is possible. We are targeting 5 trillion, but it is not impossible for us to make 6 trillion is some of the issues around the operating environment are talked about.”
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