1% of GDP given out as tax waivers, incentives – FG
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has stated that as the federal government strives to increase revenue, one per cent of the nation’s Gross Domestic Product (GDP) is being given out as tax waivers and incentives. He made the remark at the resumed interactive session organised by the House […]
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has stated that as the federal government strives to increase revenue, one per cent of the nation’s Gross Domestic Product (GDP) is being given out as tax waivers and incentives.
He made the remark at the resumed interactive session organised by the House of Representatives Committee on Appropriation on Monday.
The minister was responding to a question by members of the Committee on Tax Waivers.
According to him, due to various leakages and waivers, Nigeria revenue utilisation in budget funding is still low at 10 per cent while other African countries have up to 25%.
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Edun said it clearly shows that Nigeria has less revenue to fund its budget in a tight fiscal space, hence the resort to borrowing.
He however informed that, the multiplicity of taxes is being compressed, adding that 90 per cent of revenue collected and remitted to government coffers are from nine sources while the others are almost completely lost through various leakages.
Speaking on tax waivers afterwards, the Comptroller General (CG) of the Nigeria Customs Service (NCS), Bashir Adewale Adeniyi said tax waivers were given under the Import Duty Exemption Certificate (IDEC) by the Ministry of Finance.
He said that N1.8 trillion was given as IDEC in 2023.
He however noted that IDEC approval was a presidential power that was delegated to the minister of finance.
He said, “We have the data for the last three years and we will avail the committee with it as requested”.
Adeniyi however noted that there are benefits derived from the waivers as the monies were being routed to various infrastructural developments in the country, which are beneficial to the economy.
Earlier, chairman of the committee, called on the CG, NCS to increase the targeted revenue of N5 trillion in the 2024 budget.
According to him, the implementation of the N27.5 trillion “Renewed Hope Budget” presented by President Bola Ahmed Tinubu would not be achieved unless revenue-generating agencies increased their targeted revenue.
Responding, the CG said the service is determined to increase its revenue collection and remittances for the year 2024.
He however noted that the federal government should review concession grants in 2024, so that the NCS might be able to realise the N6 trillion in revenue.
According to him, the new law will also help Customs to facilitate a number of issues that will make revenue generation possible.
He said, “It is one of those areas where this kind of revenue for 2024 is achievable. If we can get N1.8 trillion in one year that shows the N6 trillion revenue for 2024 is achievable”.