The Senate will reduce the import duty waivers proposed for the N19.76 trillion 2023 budget, which will result in a N12.4 trillion deficit.
Solomon Adeola, Chairman of the Senate Committee on Finance, stated this in Abuja on Tuesday during an interactive session with revenue-generating agencies on the 2023-2025 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP.
According to Mr Adeola, the reduction became necessary due to the projected N12.4 trillion deficit in the 2023 budget estimates and the nation’s current dwindling revenue profile.
Mr Adeola stated that a concerted effort must be made to reduce the growing budget deficits, and that borrowing trends cannot be allowed to continue unabated.
He said there was an urgent need to look inward towards increased revenue generation and blocking of leakages.
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“About six trillion was provided as waiver for companies in the 2023 proposal, but we should reduce it by 50 per cent.
“I don’t think we can accommodate that, we need to reduce the six trillion waiver by 50 per cent,” Mr Adeola said.
Mr Adeola also urged the Ministry of Finance to place 63 Government Owned Enterprises, GOEs, on cost of collection to fund their expenditures with immediate effect.
This, he said, would generate more revenue to fund the deficit envisaged in 2023 budget.
According to him, placing the agencies on cost of collection would spur the GOEs to collect more, because the more they generate, the more they receive.
Mr Adeola also called for a review of pioneer legislation status on tax of some companies in the last five years.
The Minster of Finance, Budget and National Planning, Zainab Ahmed, in her presentation on 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 was projected to be N19.76 trillion.
Responding to questions from senators, she said that it was the assumption of 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 subsidy.
She said the deficit envisaged in the budget was a concerned and debt serving was consuming a chunk of the nation’s revenue.
Mrs Ahmed said there was 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 credit to some companies and waivers, she said: ”Tax credit 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, Hamid Alli, in his presentation, said the 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 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 Muhamnadu Buhari
He urged the committee not to legislate against it as it was only given to companies with evidence of projects execution.
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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.
The revenue generating agencies expected to appear at the five-day programme to make presentation on their revenue projections for the 2023-2025 MTEF-FSP includes the Central Bank of Nigeria, CBN, Nigeria Port Authority, amongst others.