Mrs. Zainab Ahmed,the Minister of Finance, Budget and National Planning, adamantly maintains that only the collection of more taxes and effective blocking of revenue leakages are realistic measures that would drastically cut borrowings and reduce the high debt burden of the nation. She said this during a workshop on tax expenditure organised by the ECOWAS Commission under the Context of the Implementation of the Support Programme for Tax Transition in West Africa (PATF) in Abuja.
The workshop was set up to examine the directives on harmonisation of tax expenditure management practices and to monitor and evaluate tax transition in ECOWAS member states. The minister who was represented by the Director, Technical Services in the Ministry, Fatima Hayatu, said the issue of tax expenditure was a great concern for the government.
Recall that in July, the government had said the country’s debt service cost in the first quarter (Q1) 2022 was N1.94 trillion, N310 billion higher than the actual revenue received during the period which is a clear indicator that Nigeria’s debt service cost outweighs its revenue. Ahmed however said that the debt burden is not more than the government can handle. She said: “If we have more taxes and redirect the taxes to the right fiscal sectors of our economy, we will reduce our debt burden. It is not as if the debt is beyond what the government can handle. If you look at the ratio of the debt to the Gross Domestic Product (GDP), I think the government is doing well. The debt is not something that cannot be surmounted. The programme is to block leakages where the taxes are being diverted. So, if we block leakages, and if it is transparent, Nigeria will borrow less and we will have more money to finance other sectors.” She also said the government will commence the rationalisation of tax exemptions by taking out old pioneers and other tax incentives for matured industries, adding that the country is reaping the benefits of tax exemptions and concessions given to small businesses, contrary to what was obtainable in the past. She explained: “A lot has changed, the system is more transparent and tax expenditure that government has given which is tax for bond is to encourage ailing and infant industries to do more and employ more youths.’’