The Federal Government of Nigeria (FGN) has released the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for fiscal years 2018 to 2020. The MTEF/FSP, issued pursuant to the provisions of the Fiscal Responsibility Act, documents FGN’s economic agenda, fiscal policies and strategies, as well as projected revenue and expenditures over the three-year period. These set the tone for FGN’s 2018 to 2020 budgets which are expected to be prepared in line with the agenda, policies and strategies described in the MTEF/FSP.
The document highlights FGN’s plans for achieving its defined objectives which include a 7% Gross Domestic Product (GDP) growth by 2020, in alignment with goals set out in the Economic Recovery and Growth Plan (ERGP). Some of the fiscal strategies the FGN intends to pursue to achieve these objectives include: broadening revenue receipts by identifying and plugging revenue leakages; improving efficiency and quality of capital spending with greater emphasis on critical infrastructure; rationalizing recurrent expenditure; and gradually consolidating fiscal measures to maintain the fiscal deficit at below 3% of GDP
The MTEF/FSP demonstrates FGN’s efforts towards multi-year budgeting with a view to appropriately balancing the allocation of public resources among competing needs on a rolling basis over the medium term.
OVER $50M FROM VAIDS IN 4 MONTHS
Chairman of the Federal Inland Revenue Service (FIRS) Babatunde Fowler has disclosed that the Federal Government has realized over $50m from the Voluntary Assets and Income Declaration Scheme ( VAIDS).
The Vice – President, Prof. Yemi Osinbajo, had earlier this year launched VAIDS which is an initiative designed to encourage voluntary disclosure of previously undisclosed assets and income for the purpose of payment of all outstanding tax liabilities. The Scheme commenced on 1 July 2017 and would last for a period of 9 months.
The scheme is being implemented by the FIRS in collaboration with all 36 State Internal Revenue Services (IRS) and the FCT IRS.
Mr. Fowler called on the general public to give total support to tax authorities and revenue agencies to enable us efficiently discharge our duties by collecting the needed revenue to fund government projects and services. He also stated that a platform has been created where other revenue agencies such as Nigeria Custom Service, Immigration and Federal Road Safety Corps work hand in hand to optimize revenue collection. He reiterated that from next year individuals must show evidence of tax payment before they can renew or be issued a new passport.
Furthermore, the FIRS boss disclosed that by the end of the year the database on those who pay tax would be completed, warning that from next year defaulters may not enjoy government services. Fowler noted that some arrangements to provide software and infrastructural facilities at all state offices, accountant general automation and deduction of payment of this taxes were all yielding positive results. This would increase IGR at the federal level. Out of the VAT collected, 25% rebate goes back to the states.
IMF ENCOURAGES NIGERIA TO STOP TAX HOLIDAYS
The International Monetary Fund has advised the Federal Government to urgently revisit tax holidays and exemptions given to companies. It specifically urged Nigeria to implement a reform that would see it phase out tax holidays and exemptions eroding the Company Income Tax base.
The IMF also asked the Federal Government to increase taxes imposed on tobacco and alcohol, emphasizing the need for socially responsible fiscal adjustment based on revenue mobilization.The Senior Resident Representative and Mission Chief for Nigeria, Africa Department, IMF, Mr. Amine Mati, who said this in Lagos on Saturday, also stated that the Federal Government needed to reduce interest payments on borrowed funds to about 30 per cent of the country’s revenue. According to Mati, there is also a need for Nigerian policymakers to move beyond voluntary compliance measures in tax matters in order to mobilize non-oil revenue and increase the fiscal space. He stressed the need to embark on full Value Added Tax and broaden it.
On monetary policy, Mati welcomed the recent “de facto” tighter monetary policy stance and said there was a need to “stop the financing of the central bank to the government and strengthen the monetary policy framework.” On exchange rate, the IMF chief told the Central Bank of Nigeria that the “recent introduction of the Investors and Exporters FX window is welcomed and there is a need to address market segmentation; remove FX restriction; simplify/unify the FX market; and improve operations of the FX market in line with market fundamentals.”
EASE OF DOING BUSINESS IN NIGERIA– REDUCED COST OF PPPS
For private companies seeking to do business with the Federal Government in the form of Public Private Partnerships (PPP), the good news is that the cost of PPPs has reduced. This is as a result of the removal of 2 compliance certification fees by the Infrastructure Concession Regulatory Commission (ICRC). The fees are the Outline Business Case (OBC) and Full Business Case (FBC) compliance certification fees. The directive became effective from October 19th, 2017.
The acting Director General (DG) of the ICRC, Mr. Chidi Izuwah, said the decision was a result of the feedback received from stakeholders and potential investors who complained that the cost of PPPs project preparation was too high and procedure cumbersome.
In a bid to ease business in Nigeria, the ICRC initiated steps aimed at mitigating the bottlenecks that impede the successful conclusion of PPP projects. With the removal of these fees, it is expected that private companies engaging in PPPs with the government can complete the project preparation phase in less time and with less costs, which should in turn serve as a stimulant to attracting more investment.
In Partnership with Nigerian Investment Promotion Commission (NIPC), National Institute of Marketing Nigeria (NIMN) and Securities and Exchange Commission (SEC)
Editor: Chienye Nnenna Obiajulu, LL.M
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The Launch of the Nigerian Port Sector Process Manual written and developed