The Federal Government has cleared the air on the N5 billion oil subsidy palliatives it offered to states to cushion the impact of fuel subsidy removal, saying the money is a mixture of grant and loan, inferring that part of the funds would be repaid to the Federal Government.
It added that it has released N2 billion only to state governments.
This was disclosed by the Minister of Finance and coordinating minister for the economy, Mr. Wale Edun, when he addressed journalists at his maiden press briefing in Abuja on Friday.
Mr. Edun said the Federal Government decided to release N2 billion only as the first tranche to forestall a spike in inflation, and maintain macroeconomic stability if N5 billion had been released, stressing that the Government was mindful of the consequences of its decisions, hence, it opted to stagger the release of the palliative funds.
The Minister of Finance and coordinating minister for the economy explained that the N5 billion palliatives to states is “a blend of grant to and borrowing by the state governments”.
Mr. Edun said “the President is going to deliver a better life to Nigerians by encouraging investment that increases productivity that grows the economy and thereby creating jobs and reducing poverty”.
Mr. Edun stated that in terms of how to get to where Mr President is going to take us, the key is to increase revenues so that the government has enough funding to carry out its obligations and to stabilise the economy as a whole.
“On one hand, it is by increasing tax revenue not by increasing taxes necessarily but by bringing greater efficiency; the aim is to bring greater efficiency to cut leakages and to maximize the legitimate revenue that should come to the government.
“Likewise in order to gain and build public trust, there will be emphasis on efficiency in government expenditures and similarly effective debt management so that borrowing has the link to it, the return on investment, we will borrow and you will see the cash flow that will repay that borrowing.”
The minister pointed out that plans are in the offing to review tax incentives being enjoyed by some entities, noting that though they are not bad, but as time changes, the incentive regime has to be reviewed to avoid being a distortion to economic growth.
He disclosed that N6 trillion was expended as tax incentives annually, and that the country would have been harvesting N20 trillion annually from taxes if Nigerians were paying their right taxes.
READ ALSO FROM NIGERIAN TRIBUNE
and then