by frontiers | November 14, 2017 6:43 pm
Minister for Budget and National Planning, Sen. Udoma Udo Udoma on Tuesday shed light on how the Federal Government hopes to fund the 2018 budget and said government would use key reform initiatives contained in the Economic Recovery and Growth Plan (ERGP).
President Muhammadu Buhari had last week presented the 2018 budget, tagged “Budget of Consolidation’’ to the joint session of the National Assembly.
Udoma who gave an overview of the budget in Abuja said the Federal Government would deploy new technology to improve revenue collection, enhance tighter performance management framework for State Owned Enterprises (SOEs) and stronger enforcement action against tax defaulters.
He said the 2018 revenue projections reflects new funding mechanism for Joint Venture (JV) operations, allowing for cost recovery in lieu of previous cash call arrangements saying “Restructuring government’s equity in JV oil assets, (reduction in equity holding) with proceeds to be reinvested in other assets.
“This will improve efficiencies in the operations of the JVs and position them for better revenue performance in the future. Increase in excise duty rates on alcohol and tobacco. Tax administration improvement initiatives to positively affect collection efficiencies across various tax categories such as tax amnesty programme.’’
Udoma said additional oil-related revenue including: royalty recovery, new/marginal field licences, early licensing renewals and review of the fiscal regime for oil Production Sharing Contracts (PSCs), would also be employed.
He said oil revenue would account for 37 per cent of the estimated revenue while independent revenue was put at 12.8 per cent, JV equity restricting, 10.7 per cent, Company Income Tax (CIT), 12 per cent and Value Added Tax (VAT), 3.1 per cent.
Customs is expected to account for 4.9 per cent, recoveries, 7.8 per cent, tax amnesty 1.3 per cent, signature bonus 1.7 per cent, grants and donor funding 3 per cent and other unnamed sources to account for 5.5 per cent of the revenue.
He said just like earlier budgets by the administration, it would ensure that funds were geared towards financing various capital projects
He cited some projects the Federal Government would embark on across several sectors of transport, power, health, education, works, housing, water resources agriculture and rural development, mines and steel development and special intervention programmes among others.
Udoma said though the Federal Government had earmarked N2.42 trillion for capital projects, it would attract private sector involvement in the implementation of the projects, especially roads.
“What we need to construct roads is in trillions and we do not have that money now that is why we are involving Public Private Partnerships (PPP).
“Let us say what we have in the budget to use for roads, though would not be enough, would be Federal Government’s contribution towards construction of roads, while other support would come from the private sector.’’
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