MINISTER of Finance, Mrs Zainab Ahmed on Wednesday, lamented Nigeria’s revenue to GDP ratio of seven per cent and challenged revenue generation agencies to brace up and broaden the non-revenue base of government.
“We have therefore faced difficulty in mobilising domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth.
“Our current revenue to GDP ratio of about seven per cent is unsatisfactory and we are keen on exerting all efforts in turning this around,” Ahmed said at the unveiling of Federal Government’s Strategic Revenue Growth Initiatives (SRGI) for sustainable revenue generation in all sectors of the economy.
“The case remains the same with our current contribution between oil and non-oil revenues to oil and non-oil GDP, for which our analysis on oil revenue to oil GDP reveals as 39 percent while non-oil revenue to non-oil GDP as 4.2 percent.
“Our VAT revenue to GDP in Nigeria for example stands at 0.8 percent, which compares unfavourably to the ECOWAS average of 3.4 percent. So also, is our excise revenue which is 4.1 percent, compared to Ghana at 15 percent or Kenya at 19.5 percent.
ALSO READ: Nigeria’s current debt market size of N19.45trn still low —Analysts
Zainab disclosed that government was already contemplating an increase in the rate of value added tax (VAT) but that the increment would not be uniform for all goods and services when it is eventually approved and sent to National Assembly.
Although debt to GDP ratio is about 20 percent, debt to revenue ratio is well over 62 percent.
Ahmed said “the first thematic area is on achieving sustainability revenue generation to optimally collect revenues, so we always maintain fiscal buoyancy and resilience.
“The second thematic area is on identifying new revenue streams and enhancing the enforcement with regards to revenue collection on our existing revenue streams.
“The third thematic area is targeted at achieving cohesion between revenue generating entities and equipping them with cutting-edge tools and expertise needed to support high performance, so we can turnaround our current performance on revenue outturn to meet revenue targets that we are charged with.
“The revenue initiatives have been broken into clear implementable portfolios for each relevant MDA and I believe that these are well thought out initiatives targeted at improving our tax base and collections, ensuring we have big data to work with, deploy a single trade platform, among many others.”
The Minister also disclosed a strong coordinating and governance unit will be deployed to monitor progress and results on revenue generation, which she will chair.
Earlier, the permanent secretary Presidential Initiative on Continuous Audit be(PICA), Dr Mohammed Dikwa while giving an overview “the Strategic Revenue Growth Initiatives (SRGI) serves as one of the mechanisms that will assist in improving public confidence in the tax system, delivering on governments priorities as it concerns the welfare of its citizens, growing the revenue system while ensuring the full recovery of our stolen commonwealth.
“It is now left for us as reform drivers with the needed political will from the top, to steer the ship in the right direction and this requires a great deal of perseverance, commitment, dedication and discipline on our side to enable solutions that will be beneficial to our country.”
and then