In this concluding piece of a two-part report, TUNDE AJAJA examines how graft, wastefulness, bad policies and apathy short-changed Federal Government of huge revenue, forcing it to embark on borrowing binge
examines how graft, wastefulness, bad policies and apathy short-changed Federal Government of huge revenue, forcing it to embark on borrowing bingeits frequent recourse to borrowing on account of low revenue, the Federal Government has continued to sustain practices that deprive it of increased revenue. This is in addition to its refusal to deploy technology to optimise its tax revenue.
She stated, “You discover that it is when it is close to election time that people who want to vie for political offices rush to where they feel they would get the cheapest TCC to present to their political parties. It’s as if TCC is a commodity that you shop for the lowest and then pay a nominal amount to get. This is a certificate that is not even linked to the asset they have declared.”
With such a huge number, their substantial compliance with their tax and levies obligations could translate to significant increase in revenue for all levels of government. This therefore raises the question as to why there is low tax compliance by MSMEs. She added, “Imagine if every registered business has a TIN, simply by connecting the Corporate Affairs Commission and the Federal Inland Revenue Service .”
“More SMEs are willing to pay their taxes. They only need four things; educate me; make the process simpler for me; support my business and use my money judiciously. If we do these, the compliance will improve.” The Nigeria Extractive Industries Transparency Initiative revealed in December, 2022 that between 2009 and 2020, Nigeria lost a massive 619.7 million barrels of crude oil worth N16.25tn to crude oil theft. This was the same period the government embarked on frequent borrowings.
The NNPCL Group Chief Executive Officer, Mele Kyari, admitted in May, 2022, “Needless to say that the refineries were essentially not properly managed over time, not just today but in the last 20 to 25 years. The turnaround maintenance processes were clearly mismanaged over time. I have said this over and over.”
“Despite the oil prices rising the way they have been, net oil and gas revenues have been coming down because of the tremendous impact of the subsidy,” Awasthi noted. Oyedele said if the NNPCL optimises oil production and the government addresses the issue of crude oil theft, and since the Nigerian government owns about 60 per cent in most of the oil blocks, this gives the government close to one million barrels of oil per day.
While the government on one hand continued to borrow from domestic and external sources, an individual, a former Accountant General of the Federation, Ahmed Idris, was arrested in 2022 for alleged N109bn fraud. The EFCC Chairman, Abdulrasheed Bawa, disclosed that the commission had recovered a whopping N30bn from the erstwhile AGF.
The Executive Chairman, FRC, Victor Murako, said in May, 2021 that 32 MDAs refused to remit N1.2tn to the government. He lamented, “Sadly, many MDAs still persist in defaulting and practically keeping money away from the Federal Government’s reach for funding its budgets.” In fact, reports emerged last year that the FIRS wrote to MDAs to demand the remission of N1tn they collected as tax on behalf of the Federal Government.
Speaking on January 12 during his 64th birthday celebration, Lawan stated, “We have to look inward and generate more money to execute landmark projects and infrastructure. He stated, “In 2021, for instance, the Central Bank of Nigeria sold an estimated $18bn as interventions in the foreign exchange market at a hugely subsidised average rate of N400 per dollar. Effective exchange rate in the economy at the time was N560/$. This meant an estimated subsidy of N160/$ which translated to a conservative estimated revenue loss of N2.9tn.
He added, “It should be stressed that this is not a devaluation proposition. It is a strategy meant to correct distortions in the forex ecosystem, boost government revenues, curb corruption in forex transactions, enhance liquidity in the forex market and raise investors’ confidence in the Nigerian economy.
Overall, he said until the government was properly committed to fiscal consolidation, which entails managing finances, expenditure and optimising revenue, in addition to adhering to lofty suggestions to boost tax revenue, the country may continue to sink deeper into debt and Nigerians would keep on bearing the consequences.
Indeed, the 21.47 per cent inflation inexorably contributed to the spike in the cost of goods and almost every item in the country in recent times, a development many Nigerians described as unprecedented and choking.
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