The likelihood of an increase in the nation's tax rates has been ruled out by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.In an interactive session with Mr. Abubakar Kabir Bichi, the chairman of the House of Representatives committee on finance, he announced that his ministry would prioritize income collection in the 2024 fiscal year instead of raising taxes.
The goal of the interactive meeting with the Minister, government-owned businesses (GOEs), and the committee was to increase income collection above the N27.5 trillion estimated for the 2024 budget.
In response to inquiries from the committee, the minister argued that raising taxes would be ineffective since the nation needs to draw in both domestic and foreign investment.
"You did mention that there is a plan for tax increases," he said. In my opinion, there isn't a plan to raise tax rates in the traditional sense. There is a strategy in place to raise tax revenue. The goal is to raise tax returns and tax revenue as a percentage of GDP from approximately 9% to 18% in three years, which is more in line with the norm for Africa.
Therefore, the focus is on collections rather than raising tax rates. It is improving the administration of taxes, especially collection efficiency.
The goal would be to even lower taxes where feasible to give people more money to invest in the production and creation of jobs in a movement that depends on investment, as you mentioned. Foreign and domestic investment both depend on private sector investment to grow the economy, create jobs, and reduce poverty. It is imperative to clarify that.
The Minister emphasized the need to reduce waste and leakages in government spending after acknowledging that spending on essential social services and infrastructure, such as health and education, is still insufficient.
The Minister noted that the 2024 budget forecasts remain acceptable in light of estimates for oil production, exchange rates, and borrowings. The Minister also emphasized the need for accountability in income derived from oil proceeds.
This is due to the Committee's and the Nigeria Customs Service's (NCS) decision to raise the service's 2024 revenue objective to N6 trillion from the original N5 trillion planned revenue target.
In an effort to realize President Bola Tinubu's renewed hope program, Bichi begged Mr. Adewale Adeniyi, the Comptroller General of NCS, to consider raising the N5 trillion aim.
He praised the president's 2024 appropriations bill, but pointed out that it wouldn't happen until there was sufficient funding to cover the N27.5 trillion request.
The head of NCS stated that it is feasible to generate N6 trillion in income by 2024.
According to him, that will depend on how the concession grant problem is examined in 2024.
He declared, "If we can raise N1.8 trillion in a single year, it proves that the N6 trillion in revenue for 2024 is doable."
Many of the products in the ports, he added, had not yet been cleared. He also mentioned that several bills had not been opened when the NCS examined its system.
He added that there were still many products that needed to be approved, but an internal assessment revealed that the NCS had made almost N11 billion from that effort.
He added that the Import Duty Exception Certificate (IDEC) cost the agency N1.8 trillion in 2023. Excise made up 18% of total revenue in the same year.
"I agree wholeheartedly with you that there is a possibility of N6 trillion," he said. Although we are aiming for 5 trillion, it is not out of the question for us to reach 6 trillion if certain concerns regarding the operating environment are discussed.