President Muhammadu Buhari, yesterday, revealed plans to review existing tax laws in the country.
He stated this when he presented a N16.39 trillion budget proposal for the 2022 fiscal year to a joint session of the National Assembly.
During the presentation of the Appropriations Bill 2022 at a joint session attended by members of both chambers of the National Assembly, Buhari said the country’s debt profile was rising because the Federal Government had to spend its way out of recession.
The president disclosed that efforts were being made by his administration to partly support the realisation of fiscal projections by reviewing the current tax and fiscal laws to produce a draft Finance Bill 2022.
“It is our intention that once ongoing consultations are completed, the Finance Bill would be submitted to the National Assembly to be considered alongside the 2022 Appropriation Bill,” he said.
Buhari, who tagged the Appropriations Bill 2022 “Budget of economic growth and sustainability,” said allocations to MDAs were guided by the strategic objectives of the National Development Plan of 2021-2025.
He said the plan included diversifying the economy with robust MSME growth, investing in critical infrastructure, strengthening security and ensuring good governance, enabling a vibrant, educated and healthy populace, reducing poverty and minimising regional, economic and social disparities.
He said defence and internal security would continue to be top priority for his administration.
“We remain firmly committed to the security of life, property and investment nationwide. We will continue to ensure that our gallant men and women in the armed forces, police and paramilitary units are properly equipped, remunerated and well-motivated,” Buhari said.
He explained that the parameters and fiscal assumptions of the 2022 Appropriations Bill were based on the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper.
He said oil price benchmark was pegged at $57 per barrel, oil production estimate at 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day), exchange rate at N410.15 per US Dollar and projected GDP growth rate at 4.2 per cent and 13 per cent inflation rate.
Based on these fiscal assumptions and parameters, total federally-collectible revenue was estimated at N17.70 trillion in 2022, he said.
The president said while total federally distributable revenue was estimated at N12.72 trillion, total revenue available to fund the 2022 federal budget was estimated at N10.13 trillion, an amount which includes grants and aid of N63.38 billion, as well as the revenues of 63 government-owned enterprises.
He said oil revenue was projected at 3.16 trillion, non-oil taxes estimated at N2.13 trillion and federal government independent revenues projected at N1.82 trillion.
He said out of the total expenditure of N16.39 trillion proposed for the Federal Government in 2022, N768.28 is for statutory transfers of N768.28 billion; N6.83 trillion is for non-debt recurrent costs and N4.11 trillion for personnel costs.
Others are N577.0 billion for pensions, gratuities and retirees’ benefits; N792.39 for overheads; N5.35 trillion for capital expenditure, including capital component of statutory transfers; N3.61 trillion for debt service, and N292.71 billion for sinking fund to retire certain maturing bonds.
He, however, emphasised that the expected total fiscal operations of the Federal Government would result in a deficit of N6.26 trillion, an amount representing 3.39 per cent of estimated GDP, which, according to him, was slightly above the three per cent threshold set by the Fiscal Responsibility Act 2007.
“As you are aware, we have witnessed two economic recessions within the period of this administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt. It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.”
Buhari said Nigeria does not have a debt sustainability problem, but that of generating revenue.
Since Buhari assumed power in 2015, Nigeria’s economy has slipped into recession twice.
The Debt Management Office (DMO) said Nigeria’s total public debt (federal and state governments) climbed to N35.46 trillion at the end of the second quarter of 2021.
