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For the first time in Nigeria’s budgetary regime and national planning, current administration of President Muhammadu Buhari’s second term can be said to be the first time the economy has been with a signed national budget, but no release of fund for capital projects for over 44 days.
Today, Friday, July 12, 2019, made it the 44th day after the 2019 budget was signed into law by the President, but the Federal Government is yet to release funds to Ministries, Departments and Agencies for the implementation of capital projects. Also, Wednesday this week (July 10, 2019) marked the seventh in a row the Federal Executive Council (FEC) meeting did not hold due to none appointment of ministers by the President.
Analysts say Federal tax and associated levies coming under Nigeria tax basket make about 15 per cent of federal monthly revenue while crude oil sales make up the remaining lump.
Business Hilights recalls that President Buhari had on 27th May signed the 2019 budget of N8.91tn, made up of capital expenditure of N2.09tn, recurrent expenditure of N4.07tn, statutory transfers of N502bn, fiscal deficit of N1.92tn and special intervention of N500bn, whereas taxpayers had continued to fulfill their tax obligations, the Federal Government has decided to hang the use of taxpayers’ money to do the needful.
Analyst say such acts by a seating government further fuels the withdrawal of interests to pay taxes especially when collected taxes are locked up without making use of it.
Across the federation, there had been rising complaints of bad federal roads, electricity crisis, jumping housing deficit, stockpiling debts owed contractors and standstill of new contracts due to absence of ministers since May 29 inauguration.
However, while some pundits argue that it has no meaning paying taxes as and when due when the government that statutorily uses the fund does not release collected taxes for national development project which it is meant for in the first instance.
In an interview recently, the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, hinted the possibility of tax reduction by the Federal Government but with a caveat, saying “there has to be a strategic plan whereby when we get a high level of compliance and the tax revenue is close to being sufficient, then we can consider reducing the tax rate.”
Recall that during the 2019 presidential campaign, one presidential candidate argued that one ways Nigeria can expand its tax net is to reduce taxes especially Personal Income tax and the Company Income Tax so as to encourage more into the very shallow tax net in the country.
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