MINISTER OF FINANCE SAYS FISCAL DISCIPLINE, RATIONAL ALLOCATION OF RESOURCES ARE VITAL FOR ECONOMIC GROWTH
Fiscal discipline, improved revenue generation, rational allocation and efficient use of resources must be imbibed every tier of Government in the country to return the economy to the path of sustainable growth and development.
Other efforts needed to put the country on sustainable growth include the refocusing attention on quality investment in the real sectors of the economy namely agriculture, manufacturing, mines and steel, as well as the promotion of Micro, Small and Medium Enterprises as the critical contributors to the growth of our Gross Domestic Product (GDP).
Minister of Finance, Mrs. Kemi Adeosun stated this in a keynote address at a Retreat organized by the Federal Ministry of Finance in collaboration with the Federation Account Allocation Committee (FAAC) on the theme “Enhancing the Effectiveness of FAAC,” on Thursday in Uyo, Akwa Ibom State. The Minister was represented at the event by the Permanent Secretary, Federal Ministry of Finance, Dr. Mahmoud Isa-Dutse,
She stated that the economic reforms of the Federal Government have been geared towards wealth creation, employment generation, poverty reduction, development of the non-oil sector and value re-orientation.
“Programmes like the promotion of Micro, Small and Medium Enterprises (MSMES), the initiation of N-Power and a number of others were designed to empower the citizenry, encourage private enterprises and change the way Government does business. It is my firm belief that the pursuit of economic diversification through promotion of private enterprises is one of the ways we can unlock the untapped socio-economic potentials for social progress, economic growth and national development,” Mrs. Adeosun said.
“I am happy to state here that the present Government is intensifying efforts in this direction and very soon the multiplier effect will become obvious,” she noted.
She explained that the Retreat, which was attended by all the Commissioners of Finance from the 36 States of the Federation and the Account-General of the States, came at a critical time when the country was combating a recession in the face of dwindling Government revenue.
“This Retreat is predicated on the need to provide a platform for participants to contribute to the on-going efforts to mitigate the shocks that the economy is currently experiencing as a result of the revenue shortfalls,” the Minister reiterated.
Mrs. Adeosun charged participants “to collectively come up with constructive ideas that will facilitate the implementation of the present government’s Economic Recovery and Growth Plan (ERGP), which is aimed at achieving sustained inclusive growth through structural transformation and diversification of the economy.”
The Minister stated that the three tiers of Government should apply the best international practice in Public financial management and emphasized: “We must block all observed loopholes and strengthen public financial management. While making frantic efforts to realize this, there is urgent need to reposition FAAC for enhanced performance through efficient management of accrued scarce resources for national development.“
In his speech, the Governor of Akwa Ibom State, Deacon Udom Emmanuel, who was represented by his Deputy, Mr. Moses Ekpo, called for the review of the current Revenue Allocation Formula.
The Governor said: “Given our common experience about development in our country, our sharing formula should be weighted more towards the States and Local Government Councils than the practice today.”
The Governor said that Akwa Ibom has successfully become a major producer of tomatoes, onions and cassava in commercial quantity as a result of the efforts of his administration to diversify the economic base of the state.
“Our State has joined the league of others in the production of Cocoa, rice and other cash crops in commercial quantities,” he said.
FG RELEASES DETAILS OF ANOTHER PARIS CLUB REFUNDS MADE TO STATES
FG has released a State by State breakdown of another tranche of Paris Club refund of over-deductions on Paris Club, London Club Loans and Multilateral debts on the accounts of States and Local Governments (1995-2002) as contained in the table below:
S/NSTATEAMOUNT PAYABLE (NGN)
These payments which totalled N243, 795,465,195.20 were made to the 36 States and the Federal Capital Territory upon the approval of the President on May 4, 2017, in partial settlement of long-standing claims by State Governments relating to over-deductions from their Federation Account Allocation Committee (FAAC) allocation for external debt service arising between 1995 and 2002.
The Minister of Finance, Mrs. Kemi Adeosun explained that these debt service deductions were in respect of the Paris Club, London Club and Multilateral debts of the FG and States. While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some States had already been overcharged.
The funds were released to State Governments as part of the wider efforts to stimulate the economy and were specifically designed to support states in meeting salary and other obligations, thereby alleviating the challenges faced by workers. The releases were conditional upon a minimum of 75 per cent being applied to the payment of workers’ salaries and pensions for States that owe salaries and pension. The Federal Ministry of Finance is reviewing the impact of these releases on the level of arrears owed by State Governments.
A detailed report is being compiled for presentation to the Acting President, Professor Yemi Osinbajo, as part of the process for approval for the release of any subsequent tranches.
VAIDS implementation: FG to provide training for professionals
To support the successful implementation of the recently-launched Voluntary Asset and Income Declaration Scheme (VAIDS), the Federal Government has committed to providing free training to accountants, lawyers, wealth managers, stockbrokers and other professional advisers to the public on the scheme. The free training is aimed at equipping them to give advice to their clients on participating in the scheme.
In a message to the Conference of the Chartered Institute of Stockbrokers held at the Trasncorps Hilton Hotel in Abuja on July 4, 2017, Minister of Finance, Mrs Kemi Adeosun said that professional advisers were critical to the success of the VAIDS scheme due to their role in financial management. The theme of her message was “Transiting from Recession to a Global Economic Power.”
“Those who manage wealth and undertake transactions on behalf of their clients are best placed to advise them to take advantage of the VAIDS offer by declaring their assets and income honestly” she said and enjoined Stockbrokers to join hands with the Federal Government in improving tax-payer education and compliance, crediting their side customer network as a key advantage.
She specifically commended Stockbrokers for their role in the recently launched Federal Government Savings Bonds, which relied on their distribution network. “The success of this product shows that you continue to have a wide reach and therefore must partner with Government,” the Minister noted.
She also commended the role of the stock brokers in the recent successful Eurobond and Diaspora Bond issuances, adding that despite these debt issuances, Government is focussed on changing its financing mix and on raising more revenue.
Mrs Adeosun affirmed that Nigeria is on the road to recovery and emphasised the role of investments in infrastructure to enhance productivity and competitiveness.
Citing the N1.2Trillion already released for capital projects under the 2016 budget, Mrs Adeosun assured that much more could be done if every citizen paid the correct taxes. “It would be like thinking the unthinkable; it is time that Nigerians said Nigeria First.”
ADEOSUN: TECHNOLOGY WILL ENHANCE TAX COMPLIANCE
The Federal Government will deploy and heavily rely on technology to increase tax compliance under the recently launched Voluntary Asset and Income Declaration Scheme (VAIDS). Minister of Finance, Mrs. Kemi Adeosun has said.
In an interview on Channels Television, the Minister explained that the signing of an Executive Order by the Acting President, Professor Yemi Osinbajo on Assets Declaration, underlines the seriousness attached to the scheme, which would be vigorously implemented.
The Minister stated that at 6%, Nigeria’s tax compliance rate was low whilst most developed nations were at 30-32%. "Prosperous nations have high levels of tax compliance whilst poor nations have low rates. Nigeria aspires to be a prosperous nation, so this problem must be solved."
The Minister revealed that the Government had deployed data mining to compile data on thousands of tax payers, which showed the level of non-compliance and tax evasion. Citing BVN, land registry and other sources within Nigeria as well as data from foreign Governments. She also detailed the work of an international asset tracing firm as a source of overseas data. “Technology has been key in enabling us to build an accurate financial profile for Nigerians and based on the information we gathered, we saw that the level of non-compliance was very high and we knew we had to do something about it. In the past, tracking true income and assets would have been difficult but now, it is at the touch of a button”.
The Minister revealed that further information would automatically become available in 2018 under the Automatic Exchange of Information, to which Nigeria is a party. Nigeria will automatically get information through tax authorities of various countries.
“What VAIDS is doing is giving tax payers, both companies and individuals, a window of opportunity to regularise, to come clean so to speak, to declare fully, to declare honestly. In exchange for full and honest declaration, what we are assuring is that we will waive penalties that should have been levied, waive the interest that should have been paid on overdue tax which is quite considerable, those who declare honestly will not be subject to any investigation or tax audit” she explained.
She added that the scheme is also to help increase tax awareness and education. The Community Tax Liaison Officers, who are graduates recruited through the N-Power programme, would go into their communities, schools and other public places to raise awareness and help increase tax enrolment. We are recruiting a total of 7,500 CTLOs through this scheme.
The Minister gave details of the ‘Tax Thursdays’ programme which will operate for the next one year, as announced by the Acting President and would see tax awareness activities at State and Federal Government level to improve tax education and increase the number of tax payers from the current 14 million out of 69.5 million who are economically active.
The Minister gave assurances of the judicious use of funds, saying that "tax payment is part of the civic partnership between people and Government which would enhance participation and accountability."
On the confidentiality of information generated on individuals, she assured that “all information collected would be treated as strictly confidential and our doors are open. We understand that some people have significant declarations and people can walk in to speak with me. We have already started receiving enquiries.”