The Federal Government are seriously making plans on how to raise funds to offset the deficit of the 2016 budget. In addition to this, plans being made to raise N350 billion from recovered stolen funds in the ongoing anti-graft war.
The government is making plans to see how it can realize N1 trillion ($5 billion) from sealing some revenue loopholes. A source from the Federal Ministry of Finance said that the government envisage to realize that sum from sealing loopholes during the 2016 financial year.
According to the source, the target sources for this revenue includes: The Nigeria Customs Service (NCS) , Nigerian National Petroleum Corporation (NNPC ), and the Nigerian Ports Authority (NPA) .
In addition to these, the government is planning to improve the collection and remittance of independent revenues from government agencies with the full implementation of the Treasury Single Account (TSA).
Apart from the federal government’s plans to offset the deficit of the 2016 budget by getting money from on-going anti-graft war and from blocking some revenue loopholes, experts are also of the opinion that the the FG can also tackle the issue by embarking on waste reduction initiatives.
This has to do with setting up an initiative saddled with the responsibility of ensuring that wastage of public funds is reduced. An example of such is the recently established Efficiency Unit meant to identify and eliminate wasteful spending, duplication and other inefficiencies across Ministries, Departments and Agencies (MDAs).
Waste reduction exercise could also be done by getting costing experts to scrutinize the 2016 budget proposals with a view to further improve efficiency. The F.G also have plans to extend the Integrated Personnel Payroll Information System (IPPIS) to all MDAs in order to maintain a lean payroll.
With an estimated revenue of N3.86 trillion in the face of dwindling crude oil receipts, government estimates that oil revenues contribute N820 billion of the total revenue; non-oil revenues, comprising Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies, are expected to contribute N1.45 trillion while independent revenues are expected to contribute N1.51 trillion through the enforcement of the Fiscal Responsibility Act, 2007 and public expenditure reforms in all MDAs.
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The source from the Finance Ministry also explained that the delay in putting the 2016 budget together is as a result of the difficulties in balancing Nigerian’s expectations with realities on ground.
One of the major challenges is the revenue shortfalls against increased expenditure where the budget envisaged to fund the deficit with about N1.8 trillion borrowing whereas the entire estimated revenue based on oil price of USD38 per barrel appears unrealistic, as oil prices have since crashed below the benchmark.
This crash has made both the size of the budget deficit and the matching funding also unrealistic while creating additional deficit and funding gaps, while price recovery on sustained basis is not expected soon, according to international energy experts.
The source also explained that only N67 billion increase in tax revenue is expected as the government is not going to increase tax, but will expand the tax net.