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Tuesday, February 14, 2017

FG is not increasing taxes, VAT- Minister of Budget and National Planning, Udoma Udo Udoma says


Minister of Budget and National Planning, Udoma Udo Udoma, says the Federal Government does not have any intention of increasing taxes or VAT but is working towards increasing its internally generated revenue through the broadening of its tax base.



Udoma said this at the public hearing of the Joint Session of the National Assembly on the 2017 Budget yesterday when he was responding to concerns raised by Senator Ben Murray Bruce that if the Federal government increased taxes, it will further worsen the economic fortunes of individuals and businesses. According to the Minister 


“A view has been expressed that we should not increase taxes, that we should broaden tax collection instead, that is precisely what is in the budget. There is no increase in VAT, there is no increase in company’s income tax, there is no increase at all in taxes, but people who are not paying taxes must be made to pay. So the idea is to increase revenue by broadening the tax base, not by increasing taxes.”
He told the gathering, which also included Civil Society Organizations and private sector operators, that virtually all the views expressed by the speakers have been captured in the 2017 Budget.

“The concerns that have been expressed are reflected in the budget. The need to spend our way out of recession is reflected in the budget. The need to spend in a way that will attract private sector spending is also reflected in the budget. Indeed, the thrust of the budget is to partner with private and development capital to leverage and catalyse resources for growth.”
According to Udoma, Government realized that public resources cannot be enough to drive the development process which is why the 2017 Budget is directed at catalyzing private sector resources and using PPP for a number of projects.

“If you look at housing we are putting in N100 billion but we are expecting another N900 billion from the private sector. If you look at the EPZ, we are putting in N50 billion but we are expecting a huge injection of funds from the private sector. So, this budget is aimed at achieving economic growth, aimed at achieving diversification, aimed at improving our competitiveness, aimed at improving ease of doing business, aimed at creating more jobs and social inclusion, and aimed at improving governance and security.”
According to him, the spending is targeted at areas that have quick transformative potentials such as infrastructure and agriculture, manufacturing, solid minerals, services and so on. He pointed out that the present government believes in planning. 

“When we came in, we came out with a document – the Strategic Implementation Plan for the 2016 Budget of Change. We set out short term plans for one year. We started working on a longer term plan for four years 2017 -2020; and that involved extensive consultation”.
On partnership with state governments, the Minister told the audience that the Federal Government has consulted severally with State governors and with Commissioners of Planning in all the states. 

“We are working closely with the States. We even organized a Retreat in February 2016 with all the States. In all our initiatives we are working with the States. On Agriculture we are working with the States; we even have task forces that involve State governors. So, we are working together with the States.”
Speaking on the Economic Recovery and Growth Plan, Senator Udoma said government consulted the private sector extensively. 

“Indeed, just last week we met twice with captains of industry and members of the private sector to sit down and expose the plan to them and get their input. We are going to Council soon and subsequently the plan will be launched before the end of the month."
The Minister said because government has bold plans which are tailored towards pulling the country out of recession, investors are changing their attitude towards Nigeria.

 “People have heard of our plans; they have seen the plan because we have had extensive consultations with our development partners – with the World Bank, with IMF, with UNDP. They have all been exposed to our plan and we have shown them what we are determined to do, that is why people are believing in Nigeria and investing in the Eurobond.“
He was emphatic that government has a clear vision and is on a determined path to get the economy out of recession. “We are determined thereafter to begin to go back to the path of growth, a more diversified growth, not depending just on crude oil. We want to stimulate our manufacturing sector, we want to stimulate agriculture; so we have a coherent, cohesive plan.”

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