Nigerian households and businesses should be prepared to pay more for electricity and other services as the Federal Government has hinted that it was working with an international consulting firm to widen tax base and raise its revenue particularly from the non-oil sectors of the economy.
This indication is coming as the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, said at a press conference in Lima, Peru, at the just concluded annual meetings of the World Bank and the International Monetary Fund (IMF), that the N20 paid by Nigerians per kilowatt of electricity was not cost-reflective when compared with about N80 they spend generating same unit of power using alternative sources.
Although the governor gave no further hints as to the nature of the proposed government tax raises on key utilities, he pointed out that it has already signed on the firm of Mckenzie to draw up modalities for widening its tax net to diversify the nation’s revenue streams in the face of dwindling receipts from crude oil.
Emefiele said government targets to earn additional N150 billion in tax income after it raked in about N75 billion over budget targets from the same source last year.
Reacting to queries on what the Muhammadu Buhari-led government was doing to diversify the Nigerian economy with shrinking crude income, the CBN boss stated: “In Nigeria, we have been implementing reforms, and the prime issue from the fiscal side has focused on our effort to expand our tax base. Last year, we engaged the firm of Mckenzie to work with the Federal Inland Revenue Service (FIRS) to see how we can widen the tax base and we were able to achieve about N75 billion in addition. But this year, we are looking at earning over N150 billion.”
He also hinted that the Federal Government would in the years ahead support the Nigeria Customs Service (NCS) and other revenue collecting agencies to shore up their capacity to enable them collect more revenue.
Emefiele promised that the apex bank would soon resume disbursement of its intervention fund for the power sector after resolving outstanding issues with the Nigeria Electricity Regulatory Commission (NERC) and the Nigeria Bulk Electricity Trading Plc (NBET).
Meanwhile, the Permanent Secretary in the Federal Ministry of Finance, Mrs. Anastasia Daniel-Nwaobia, said the debate on subsidy removal remains a political issue, which can only be handled by the political authorities.
According to her, government is still studying recommendations on subsidy reforms submitted by parties commissioned to review the issue and will comment on the issue in the months ahead.
http://sunnewsonline.com/new/nigerians-to-pay-more-for-power-taxes/