By Our Reporter
The sum is part of what the Federal Government plans to fund the 2022 Budget according to the details of the Appropriation Bill sighted by our correspondent on Friday.
The Federal High Court, Port Harcourt, had on August 10 ruled that states, and not the Federal Inland Revenue Service, had the legal rights to collect VAT and income tax. The FIRS has appealed the judgment.
Meanwhile, Rivers and Lagos State Governments have since signed laws authorising states to collect VAT.
The Southern Governors Forum had in a meeting held in Enugu recently also expressed support for the collection of VAT by state governments.
Despite the development, the Federal government listed its N316.69bn share from VAT as part of its share of non-oil taxes that it plans to fund the 2022 Budget with.
The projected share from VAT is N78.2bn more than the N238.42bn share in the 2021 budget and the supplementary budget of the same year.
Still, on non-oil taxes, the Federal Government plans to get N909bn as a share of CIT; N834bn as a share of Customs; and N71.9bn as a share of Federation Account Levies.
In all, the government is targeting N2.1tn from its share of non-oil taxes as against N1.5tn in 2021.
It is also targeting N3.15tn from its share of oil revenue as against N2tn in 2021.
The government is also targeting dividends from Nigeria Liquified Natural Gas and Bank of Industry totalling N195bn.
Its share of minerals and mining is put at N2.5bn among other sources of revenue.
FG begins aggressive revenue mobilisation plan, to sanction MDAs for unmet revenue targets.
To tackle the revenue problem, the Federal Government said it was beginning aggressive revenue mobilisation initiatives.
As such, the minister said the government was working on a plan to sanction ministries, departments and agencies if they failed to meet up with their revenue targets.
This, according to her, will boost the revenue performance and remittance of government-owned enterprises.
“We are working to ensure that MDAs appropriately account for and remit their internally generated revenue
“GOEs’ revenue performance/remittance will be enhanced through effective implementation of the enhanced performance management framework, including possible sanctions should they default on their targets; tighter expenditure control including enforcing of Finance Act 2020 provision limiting GOEs cost-to-revenue ratio to a maximum of 50 per cent; and regular independent monitoring and reporting of revenue and expenditure performance of GOEs by both the Budget Office of the Federation and the Office of the Accountant General of the Federation,” the minister said.
She noted that the agencies were limited to spending not more than 50 per cent of what they generated.
“These agencies cannot spend more than 50 per cent of what they generate. And this is one major revenue that would be coming into the government’s treasury,” she said.
According to her, a robust monitoring mechanism has been put in place to assess the performance of the agencies.
She added that the new plan to sanction them for revenue target failure would be included in the Finance Act 2021 or as a directive from the President.
She said, “We have some provisions that we hope to make in the Finance Act that we are currently working on. But in addition to that, we also have a robust monitoring mechanism that is regular and continuous and tracking the performance and alerting these agencies where they are already falling short.
“It did not use to happen. A long time ago, people just worked and tracking was not done. By the time you make an assessment and underperformance is reported, it is already late.
“So, we are doing more constant tracking and monitoring, continuous monthly reconciliation is being done with the revenue-generating agencies and specific sanctions may be provided either in the Finance Act or be directed by the President because that is a discussion that is ongoing. And for agencies that continually default on their targets, the leadership of those agencies will have to face some consequences.”
Earmarks N1.64tn for 2023 poll, othersAlso, the need for additional budgetary provisions for the 2023 polls, national population census next year and the implementation of the Petroleum Industry Act, among others, has forced the Federal Government to review the 2022-2024 Medium-Term Fiscal Framework and the 2022 budget.
Consequently, not less than N1.643tn has been earmarked for special police operations, national poverty reduction programme, payment of government agencies, among other critical projects, aside from the advance preparations for the 2023 polls and a national population census next year.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, made this disclosure during a public presentation of the highlights and breakdowns of the 2022 Appropriation Bill in Abuja on Friday.
She said, “The increase on the expenditure side was motivated by the need to provide for additional critical expenditures, as well as the need to present a more comprehensive FGN budget.
“Some of these provisions include N100bn additional provision for the Independent National Electoral Commission towards advance preparations for 2023 general elections; N400bn for National Poverty Reduction with Growth Strategy; N178.1bn provision for population and housing census scheduled for 2022; N50bn Police Operations Fund; N37bn additional provision for Ministries and Departments’ electricity bills debts; N517.5bn additional multi-lateral/bi-lateral project-tied loans; N54bn to NASENI, which represents one per cent FGN share of federation account; and N305.99bn for TETFUND (funded by the education tax).”
President Muhammadu Buhari, had on Thursday presented the 2022 Appropriation Bill consisting a total aggregate revenue of N16.39trillion before a joint session of the National Assembly.
Buhari told the lawmakers that his regime would finance the N6.26trillion deficit contained in the 2022 budget proposal with N5trillion which his regime proposed to borrow from local and foreign sources.
Economic and financial experts, however, advised the Federal Government to consider selling refineries and other assets being used to siphon public resources in order to realise resources required to finance part of its budget deficit of N6.3tn.
The advice came following a recommendation by the Senate asking the Federal Government to reduce its spate of borrowing and high deficit financing.
But giving the breakdown of the budget on Friday, Ahmed justified the high borrowing.
She also explained the reasons for the reviews of the 2022-2024 MTFF and the 2022 budget proposal.
According to the minister, the underlying drivers of the 2022 fiscal projections, such as oil price benchmark, oil production volume, exchange rate, Gross Domestic Product growth, and inflation rate have remained unchanged in the previously approved 2022-24 MTEF and FSP.
However, she pointed out that the revision in the medium-term fiscal framework was necessitated by the need to reflect the new fiscal terms in the Petroleum Industry Act 2021, as well as other critical expenditures in the 2022 budget.
