12th April, 2017
The Federal Government has said the recently launched Economic Recovery and Growth Plan (ERGP) would allow restructuring of some of its assets in a bid to tackle revenue problem and boost the economy.
Sen. Udoma Udo Udoma, Minister of Budget and National Planning, who disclosed this on Tuesday, said that the challenge of the country was not a debt challenge but a revenue problem,
He added that with sufficient revenue, the country would have enough money to service its debt.
“It’s a ratio, when the revenue goes down, the debt ratio goes up and we have a plan for the revenue, the plan is short term and medium term.
“Short term, we have indicated and it is there in the plan that we are going to look at the restructuring of some government assets to release additional revenue immediately in the short term
“And a committee has already been set up by the president to do this. So, that is in the document
“With the additional revenue, it will help us in terms of increasing our revenue but in the medium term the solution has to be to increase the level of tax collection.
“Not necessarily the tax rate but the levels of collection. Making sure that Nigerians pay their taxes
According to Udoma, Nigeria’s tax to GDP ratio is six per cent, the average for Africa is 16 per cent and that for most countries in Europe it is 20/ 30 per cent
He said that this ratio needed to be increased during the plan period in order to triple the country’s revenue.
“So when those revenues triple the debt will not seem so large, you will see that it is manageable
“And we do have specialist in the debt management office, their job is to monitor this and to make sure that we never have a problem with our debt,’’ he said.
Udoma explained that there were several ways of increasing the country’s revenue one of which was through tax collection.
He said: “ we are introducing efficiencies in tax collection.
“The FIRS is trying to be a bit more efficient in tax collection, trying to get more people, more companies to pay tax that is due from them
“We are also introducing efficiency in our customs collection, we are also looking at the various government agencies that generate revenue and we are trying to capture more of that revenue into the treasury.
“One of the ways that is going to help us is the treasury single account which enables us to monitor government revenue
“So we are going to insist that all agencies must bring their budget, which is the requirement of the law, and the ministry of finance will go through that budget and make sure that there is no waste.
“We will also do the same after which the agency will only spend in accordance with what is in the budget,’’ Udoma said.
He said the federal government was working at ensuring that there was no waste in both salaries and pension.