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General News of Monday, 15 November 2021

Source: www.sunnewsonline.com

32m Nigerians not paying tax - DG, budget office

Ben Akabueze Ben Akabueze

Director-General of the Budget Office of the Federation, Ben Akabueze, has said Nigeria has a revenue-generating challenge, with over 32 million citizens refusing to pay tax.

The director-general, however, added that with an inflation forecast of 13 per cent for the 2022 fiscal year, and the Federal Government’s aggregate expenditure is projected to be N16.39 trillion, 12.5 per cent higher than the 2021 budget, Nigeria is ‘assets-rich’.

With N6.2 trillion as a projected budget deficit in 2022, representing 3.39 per cent of the country’s Gross Domestic Product (GDP), Akabueze said the deficit  would be “financed by additional borrowings.”

He disclosed this at an interactive session with media executives, civil society, non-governmental organisations as well as other stakeholders on the 2022 budget, at the weekend.

The government’s target over the medium term is to grow our revenue-to-GDP ratio from about 8-9 per cent where it is currently to 15 per cent by 2025.

“At that level of revenues, the debt service-to-revenue ratio will then cease to be a critical concern…

“We must, however, continue to rationalise as we cannot afford waste.

“In reality, our largest expenditure items are currently personnel cost, debt service and capital expenditure which between them account for 85 per cent of the 2022 budget. There’s very little scope for a cut in any of these over the medium term.

“The most viable solution to our fiscal challenge, therefore, remains to grow our revenues and plug all leakages.

“According to the Joint Tax Board, only N41 million Nigerians are in the tax pool. So, that’s over 30 million Nigerians not paying their fair share (of tax). These are anonymous people,  within the system, making tonnes of money. So, how do we get these people to pay their fair share?

“Governments in Nigeria are not spending too much. They are actually spending too little. Fifteen per cent is the public expenditure ratio to the GDP. Cutting public expenditure is not a viable option for us. The only viable solution is to fix our revenue generation.

“We must all work together to fix our revenue problem. If we don’t, we will then get into a real problem. We all have to galvanise around that objective. If you take Nigeria’s demographics, there’s about 70 million people in the active population and even if you adjust for the unemployment rate. It’s about 70 per cent.

“The budget is an estimate, at this point in time; of revenues and expenditure for next year. It’s only funded at the point when you need it,” he said in response to whether funds not spent, as budgeted in the Service Wide Vote would be returned to the treasury.

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