SAN FRANCISCO, November 22, (THEWILL) –Â The Federal Government has submitted a revised version of the 2018 to 2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the Senate for consideration and approval.
Minister of State for Budget and National Planning, Zainab Ahmed at an interactive session with the Senate Joint Committee on Finance, Appropriations and National Planning allayed the fears that the adjustments would affect the N8.612 trillion 2018 budget proposal.
Ahmed revealed that the adjustments were the fallout of the recommendations of a committee chaired by Finance Minister Kemi Adeosun, which identified additional revenue sources of about N1trillion to cut the 2018 budget deficit.
She noted that the adjustments had already been reflected in the 2018 budget estimates submitted by President Muhammadu Buhari to a joint session of the National Assembly on November 7, 2017.
“The key assumptions on the macro framework as defined in our MTEF and the only difference in the key assumptions is that we have adjusted the GDP growth from 4.5 per cent,” she said.
“And this is as a result of a meeting we had with you while discussing the last MTEF down to 3.5 per cent. But all the other assumptions at 2.3million barrels per day, oil price of $45 per barrel, exchange rate of N305/$1 are the same.
“The fiscal deficit is now N2.05 trillion, down by over N940billion, also pushing the debt/GDP ratio downwards from 2.61 per cent to 1.77 per cent.
“When the FEC approved the MTEF/FSP, it constituted a Committee, chaired by the Minister of Finance, which was tasked with identifying additional sources of about N1 trillion revenues to cut the 2018 budget deficit and new borrowings.
“The outcome of the work of the Committee necessitated a revision of the MTFF, which also formed the basis of the 2018 budget proposal.
“This briefing note and accompanying submissions relate to the revised MTEF/FSP and MTFF which are in alignment with the 2018 Executive Budget proposal, and were part of the documents that accompanied the 2018 Budget laid before NASS.”
One of the major revisions was the adjustment of the Gross Domestic Product (GDP) growth rate from 4.5% to 3.5% while other key parameters and assumptions like oil benchmark, daily oil production estimates and exchange rate were retained in the revised version.
Some of the adjustments made to the 2018 to 2020 MTEF submitted by the Executive to the National Assembly in October to include: N710 billion to be generated from the restructuring of government’s equity in all the Joint Venture oil assets.
Others are N320 billion additional revenues from revision of terms to improve government take in the Production Sharing Contracts; additional N60 billion from Excise Duties on cigarettes and alcohol; N305 billion additional Company Income Taxes from the Voluntary Assets and Income Declaration Scheme (VAlDS).
Also, N100 billion from improvements by Federal Inland Revenue Service (FIRS) in the collection of Value Added Tax (VAT); N2.5 billion from special taxes on insurance of luxury cars, as well as surcharge on luxury goods and N250 billion provision as unspent balance carried forward from 2017.
