THE Federal Government will not raise Value Added Tax (VAT) and corporate taxes at least for now but would enhance the collection of VAT to increase revenue.
The Minister of National Planning, Udo Udoma, made this known while briefing State House correspondents at the end of the National Economic Council (NEC) meeting presided over by Vice President, Yemi Osinbajo, on Wednesday at the Presidential Villa, Abuja.
With him at the briefing were governors Willie Obiano (Anambra), Akinwunmi Ambode (Lagos) and Badaru Abdulahi (Jigawa).
“We do not intend to increase VAT rate at the moment but increase collection rate from 20 per cent.
“We will also not raise the corporate tax because we do not want to impose additional burden on Nigerians.
“Government’s position is however that those who make money and have not been paying taxes should pay.
“We expect at least 20 percent increase in tax collection rate which is conservative in terms of our revenue projection,” he said.
Udoma said government was determined not to cut capital budget because projects were needed to stimulate the economy.
He said: “With reference to the budget, one thing we are determined not to do is to cut any of those capital projects, because we need them to stimulate the economy.
“We are going to work with the National Assembly, to see how we can get savings. One of the areas we are looking at is our cash call elements.
“The minister of state for petroleum is looking at how we can cut our cash call elements which is about N1trillion by innovative financing.
“So, he is discussing with some oil companies and looking for some innovative financing which might pick up some of the financing so that we reduce our financial output and contribution by the Federal Government.
“That will be a major saving which can be used to plug the gap particularly with falling oil prices.”
The minister who had earlier given the council an update on the economy, said the economy had been largely affected by the decline in oil price between June 2014 and December 2015 which he said has increased domestic vulnerabilities.
Speaking on the objectives of the 2016 budget, he said it was it was geared towards alleviating the poor and the most vulnerable in the society.
He said the Accountant-General of the Federation reported to the Council that the balance of Excess Crude Account as at 31 December, 2015 stood at $2,257,937.98.
On the government agencies collecting revenue in dollars and remitting to government on naira, he said the introduction of the The Single Treasury Account (TSA) has resolved the problem.
NEC received update from the Ad-hoc Committee on Excess Crude which submitted a memo for approval on its findings and recommending 81 government revenue generating agencies for forensic auditing.
Eighteen core revenue generating agencies like NNPC would be audited by KPMG while other revenue generating agencies would also be forensically audited by SIAO, a local auditing firm Council approved engaging the forensic auditors.
On bailout funds to states, the CBN Governor, Godwin Emefiele, gave an update to the Council that 23 States have benefited from the N10 billion each from ECA-backed soft loan.
Some states have not indicated interest, while some are still holding discussions with their banks.
Twenty eight states have benefited from the Presidential bailout.