Nigerian finance minister Dr. Ngozi Okonjo-Iweala. She has discussed the national budget for the West African state., a photo by Pan-African News Wire File Photos on Flickr.
Fed Govt eyes N2.95tr non-oil revenue
The Federal Government is aiming to realise N2.95 trillion from non-oil revenue by the end of 2014, the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, has said.
Mrs. Okonjo-Iweala, who made this known to State House correspondents at the end of the Federal Executive Council (FEC) meeting in Abuja, yesterday, explained that of the amount, the Federal Inland Revenue Service (FIRS) is expected to realise about N2.2trillion, while a foreign Consultant and an international tax firm, McKinsey & Co, will be saddled with the task of getting the additional N75billion, also from the non-oil sector.
To get the N75 billion, she said efforts would be intensified to get on the system those who have either been evading taxes, or paying less taxes than they ought to pay, adding that the consultant is expected to get 1.75 per cent Commission, averaging N470million if it is able to generate the additional N75 billion non-oil revenue.
She said: “The FIRS brought a memo seeking to strengthen non-oil tax collection and non-oil revenue collection. The drive that this administration is undertaking in terms of diversifying the economy seems to be yielding results. We need to expand our tax and revenue base to be able to do better.
“Nigeria’s tax to GDP ratio currently is relatively low at 7 per cent compared to other countries of the world. Our aim is to move from 7 percent to 22 per cent over time in the medium term. We are hoping over the next five years, the country will move gradually to this ratio. We want to do that through blocking all the loopholes and leakages in tax collection. That is why we resolved to find avenues to support the FIRS,” she added.
Mrs. Okonjo-Iweala pointed out that about 65 per cent of registered tax payers did not file returns in the past two years, while about 75 per cent of medium and small businesses currently in the tax system, were also not paying tax, adding that about 30 per cent of the companies operating under pioneer status abuse those incentives and evade tax.
She said the consultant has outlined seven steps to be taken by the FIRS to boost non-oil revenue, including improved audit, tax filing enforcement, review of tax holidays and exemption, tax arrears and debt enforcement, increased registration of companies and improved external communication.
She said the President’s anticipatory approval for the award of contract for the provision of technical support for non-oil revenue enhancement and capacity building services to the FIRS in favour of Messrs Mckinsey & Company for N1.470billion inclusive of all taxes equivalent to $8.750million with a completion period of 12 months, has been secured.