Udoma Says No Plans To Increase Value Added Tax

Udo Udoma, Value Added Tax, Budget BreakdownThe Nigerian government says it has no plans to increase the Value Added Tax which stands at 5% in 2017.

The government, however, said 11% of its projected revenue would come from recoveries of looted and misappropriated funds which currently stand at 258 billion Naira.

The Minister of Budget and National Planning, Senator Udo Udoma, on Monday allayed fears of possible tax increase, as the nation battles to recover from economic recession.

At a budget breakdown session in Abuja, Nigeria’s capital, Senator Udoma expressed optimism that the proposed revenues would help fund the 2017 budget.

The session follows the December 10 presentation of a budget proposal of 7.298 trillion Naira by President Muhammadu Buhari to a joint session of the National Assembly.

President Buhari proposed that the implementation of the budget be based on Nigeria’s economic recovery and growth strategy.

The 2017 budget is based on a crude oil benchmark price of $42.50 per barrel, with an output of 2.2 million barrels per day.

Government’s expenditure is to be funded with the sum of 4.94 trillion Naira while oil is to contribute 1.98 trillion Naira of the amount.

Greater Cooperation

Meanwhile, President Buhari, in a statement by his spokesman, Garba Shehu, solicited for greater cooperation between the executive and legislative arms of government.

He noted that the collaboration would ensure the smooth implementation of government policies and programmes.

The president said that despite the Principle of Separation of Powers, both arms of government should be united in the promotion of the common good of the people.

He added that whatever differences that might occasionally arise between the two arms of government should not be allowed to compromise their common goals of promoting the greater progress and development of Nigeria.

Breakdown Of Nigeria’s 2016 Budget

Nigeria’s President, Muhammadu Buhari, on Tuesday presented a 2016 budget proposal of 6.07 trillion Naira.

Nigeria’s 2016 Budget is based on a crude oil benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016.

GDP Growth Rate Projection4.37%
Revenue Projection3.86 Naira
Deficit2.22 trillion Naira (equivalent to 2.16% of Nigeria’s GDP)
Oil Related Revenues820 billion Naira
Non-oil Revenues1.45 trillion Naira
 Projected Independent Revenues1.51 trillion Naira
Capital Expenditure1.8 trillion Naira (30%  of total budget)
Works, Power and Housing433.4 billion Naira
Transport202.0 billion Naira
Interior53.1 billion Naira
Special Intervention Programs300 billion Naira
Education369.6 billion Naira
Defence294.5 billion Naira
Health221.7 billion Naira
Ministry of Interior145.3 billion Naira
Foreign and Domestic Debt Service1.36 trillion Naira
Sinking Fund towards the retirement of maturing loans113 billion Naira
Non-debt Recurrent Expenditure2.65 trillion Naira

Note:

Deficit will be financed by a combination of domestic borrowing of N984 billion, and foreign borrowing of N900 billion totalling N1.84 trillion.

There is a proposed a 9% reduction in non-debt recurrent expenditure, from N2.59 trillion in the 2015 Budget to N2.35 trillion in 2016.

The budgeted N300 billion for Special Intervention Programs, takes the total amount for non-debt recurrent expenditure to N2.65 trillion.

The Efficiency Unit set up by the current Administration, together with effective implementation of GIFMIS and IPPIS, will drive a reduction of overheads by at least 7%, personnel costs by 8% and other service wide votes by 19%.