Nigerians got some bad news yesterday – more taxes are coming. It is all to shore up the shortfall, Minister for Finance and Coordinating Minister for the Economy Dr. Ngozi Okonjo-Iweala said yesterday.
“We’ve tried to broaden the tax-base,” the minister told reporters shortly after laying the budget before the House of Representatives. She said the Federal Government had also “closed many loopholes and leakages”.
The Minister, who also laid the budget proposal before senators, added that the economy would be driven mainly by the non-oil sector, considering the global oil price slide. “We’ve speeded up audit, we’ve closed some exemptions all of these will bring additional revenues into the coffers,” she said.
The 2015-2017 Medium Term Expenditure Framework (MTEF) presented to the National Assembly shows that Federal Government’s net revenue projection from non-oil sector is N2.075 trillion after costs and deductions for 2015. Net oil revenue was put at N3.955 trillion after costs, deductions and derivation.
The minister, who led six other ministers to the National Assembly, said in spite of the oil price slide, the Federal Government would ensure regular payment of pensions, salaries and wages to its workers.
While giving an outlook on the 2015 budget proposal, she said: “I’ve laid the budget on behalf of His Excellency, Mr President. This budget is based on few indicators, the $65 a barrel benchmark and we are going to stick to it for now inspite of the declining prices because we feel the average price next year will be around $65 to $70. The production level is 2.27 million barrel per day.
“The revised growth rate based on the new parameters for the country, down from 6.35 to 5.5 per cent next year, that is still one of the fastest growth rate we are experiencing in the world today. We have a budget expenditure of about N4.3 trillion, revenue of N3.6 trillion, we’ve tried to make up for the drop from $78 per barrel to $65 by raising non-oil revenues. This budget points to the fact that this country is a non-oil country and I think we want Nigerians to start to think of the country that way.
“So we have worked very hard to move on non-oil revenues, so we’ve closed many loopholes and leakages; we’ve tried to broaden the tax-base, we’ve speeded up audit; we’ve closed some exemptions; all of these will bring additional revenues into the coffers.
“We’ve also worked on the expenditures. On the expenditure side, in the short term, we are going to look at the administrative expenditure; equipment we will not be able to buy next year, travels and trainings will only be inside the country just on exceptional bases if someone is paying for you, you will be able to go out or if it is a critical government directive to go out.
“It is not going to be easy on the short term to do so much because we want to make sure that people get their salaries and wages and pensions are paid. We don’t want to make any adjustments on the part of our pensioners and workers but in the longer term, we will now be able to look at how to restructure governance.”
Many lawmakers, including Minority Leader Femi Gbajabiamila, said the budget was only laid without details attached. According to Gbajabiamila, “no member of the National Assembly has a copy of the budget at the moment, so no one can say he or she is going to comment on it”.
Deputy Leader Leo Ogor said the most important issue was that the budget had been laid and all other things were in the hands of the National Assembly.
The Finance Minister later broke the budget down at another forum with Finance reporters.
On specific measures to increase non-oil revenues to boost the treasury, she said: “A 10 per cent import surcharge would be imposed on new private jets, which is estimated to yield about N3.7 billion in 2015; 39 per cent import surcharge on luxury yachts, which is estimated to potentially raise N1.6 billion in 2015; and 5 per cent import surcharge on luxury cars which is estimated to yield about N2.6 billion of additional revenues.”
Mrs. Okonjo-Iweala added: “There will be a surcharge on Business and First Class Tickets on Airlines. There will be no surcharge on economy tickets. There is also an imposition of 3 per cent luxury surcharge on champagnes, wines and spirits to generate about N2.3 billion in 2015; and a 1 per cent FCT Mansion Tax on residential properties with value of N300 million and above which should yield additional N360 million.”
The budget has an aggregate revenue target of N3.602 trillion made up of: oil revenue of N1.918 trillion and non-oil revenues of N1.684 trillion (implying a ratio of 53 per cent oil revenues to 47 per cent non-oil) to fund an Aggregate Budget Expenditure of N4.358 trillion proposed for 2015 Budget, which is about 8 per cent less than the 2014 Appropriation.


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