2019 budget: FG to shore up revenue via TSA, others
In order to meet its financial obligations and significantly reduce deficit in this year’s budget, the federal government said it is taking a number of steps to shore up revenue to fund the 2019 budget.
Among the initiatives aimed at expanding the fiscal space, includes plans to improve public financial management through the comprehensive implementation of the Treasury Single Account.
Explaining why the Federal Government could not achieve its 2018 revenue target, the Minister of Budget and National Planning, Udo Udoma, said some one-off items listed for implementation in the fiscal year could not be actualised.
He gave the one-off items to include the N710billion from Oil Joint Venture Asset Restructuring and N320billion from the revision of the Oil Production Sharing Contract Legislation.
The one-off financing items has already been rolled over to the 2019 budget.
Udoma disclosed this during a meeting with the House of Representatives Joint Committee on Finance, Appropriation, Planning and Economic Development on the 2019 revenue and expenditure projections.
Already the Department of Petroleum Resources had been directed to, within three months, complete the collection of past dues on oil license and royalty charges, including those due from the Nigerian Petroleum Development Company which it had agreed to pay since 2017.
Udoma also said the Ministry of Finance, working with all the relevant agencies, had been authorised to take action to liquidate all recovered, unencumbered assets within six months.
Among other revenue generating initiatives, he said the President had directed that work should be immediately concluded on the deployment of the National Trade Window and other technologies to enhance customs collections efficiency from the current 64percent to up to 90percent over the next few years.
In spite the challenges that militated against the realisation of targeted revenues, Udoma noted that revenues generated in 2018 showed a significant improvement over that of 2017.
The minister said he expected further improvement this year with the sustained implementation of the Economic Recovery and Growth Plan.
He explained that the ERGP guided allocations in the Federal Government budget because it sets out the key execution priorities of the government for the growth and development of the economy.
The government, he added, was encouraged by the results so far attained after implementing the plan for about two years.
The 2018 budget, had total spending of N9.1trillion, with capital expenditure projected to gulp 31.5percent of the total expenditure at N2.87 trillion, while recurrent non-debt spending was put at N3.51trillion in 2018.
There was also a provision of N2.01trillion for debt servicing, which is 21 percent of the total budget while a provision of N 177 billion to retire maturing bond to local contractors was made by the government.
The N9.1trillion budget was expected to be financed from N2.99trillion to be generated from oil revenue, N31.25billion from Nigeria Liquefied Natural Gas dividend while N1.17billion was expected to be realized through revenue from minerals and mining.
To fund the budget, the Federal Government had planned to generate N658 .55billion from Companies Income Tax and N207 .51billion from Value Added Tax and N324.86billion from Customs while N57 .87billion was expected to come from federation account levies.
Government was also expected to raise N847.95billion through independent revenue from its agencies, while tax amnesty income, signature bonus and unspent balance from previous years were to provide N87.84billion, N114.3billion and N250billion.
However, details of the fiscal operations as contained in the CBN’s economic report for the fourth quarter of 2018 showed that the government had not been able to generate adequate revenue to meet its expenditure.