BEVERLY HILLS, January 28, (THEWILL) – Minister of Budget and National Planning, Udo Udoma, has revealed that the Federal Government is anticipating a 20 percent increase in the collection of Value Added Tax (VAT) this year, to plug the country’s revenue gap due to the impact of falling crude oil prices.
“Federal Government does not intend to increase taxes thereby imposing additional burdens on Nigerians,” the minister said, adding that the effort would be geared mostly towards ensuring corporate bodies remit taxes.
The increase, which is meant to shore up revenue for the funding of the 2016 budget, he said was a conservative projection as the government intended to exceed this target. VAT collection for the country stood at N1.23 trillion last year.
Briefing journalists after the Monthly National Economic Council (NEC) meeting, Udoma alongside the governors of Lagos, Anambra and Jigawa, said: “We expect about 20 percent increase in VAT collection, which is conservative in terms of our revenue projections. We are expecting much more than that. Occasionally, we try to be conserved.”
He said to finance the 2016 budget, which is currently before the National Assembly, the government was also planning to cut its oil joint venture cash call spending of about N1 trillion annually rather than cut any of its capital projects.
“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 element.
“The minister of state for petroleum is looking at how we can cut our cash call elements which is about N1trillion by innovative financing.
So, he is discussing with some oil companies and looking for some innovative financing, which might pick up some of the financings so that we reduce our financial output and contribution by the Federal Government, that will be a major saving which can be used to plug the gap particularly with falling oil prices,” he said.
Story by David Oputah
