As the country is dropping in revenue which was reportedly caused by the fall of crude oil prices, the Federal Government on Thursday said it will not increase taxes.
Speaking at the end of a meeting of the National Economic Council presided over by Vice President Yemi Osinbajo, the Minister of Budget and National Planning, Udo Udoma said there was no plan to increase either Value Added Tax or Corporate Tax. He however said it was the government’s will do everything to increase the tax collection rate, which currently stands at about 20 per cent.
The minister said, “We do not intend to increase the VAT rate at the moment, but we want to increase the collection rate from 20 per cent. We will also not raise the Corporate Tax, because we do not want to impose additional burden on Nigerians. Government’s position is, however, that those who make money and have not been paying taxes should pay. We expect at least 20 per cent increase in the tax collection rate, which is conservative in terms of our revenue projection.”
He added that the government will work closely with the National Assembly to explore other innovative financing methods for the 2016 budget. According to him. the government is planning on getting private sector funding for some capital projects.
Udoma said tolls collection is one of the options being considered for road construction and maintenance.
He added, “With reference to the budget, one thing we are determined not to do is to cut any of those capital projects because we need them to stimulate the economy. We are going to work with the National Assembly to see how we can get savings. One of the areas we are looking at is our cash call elements.
“The Minister of State for Petroleum is looking at how we can cut our cash call elements, which is about N1tn, by innovative financing. So, he is discussing with some oil companies and looking for some innovative financing, which might pick up some of the financing so that we reduce our financial output and contributions by the Federal Government; that will be a major saving, which can be used to plug the gap, particularly with falling oil prices.”
The minister added, “In addition, some of the capital projects the various ministries for infrastructure are looking at how we can get private sector funding for some of them. For instance, the airports can be concessioned, we are looking at public buy-back for some of the roads, looking at tolls. We have to be imaginative.
“But it is important not to touch the capital portion because that is important to revitalise the economy and to get our people back to work, to get growth moving again so that we can get the four per cent growth.”