loopholes
With concerns over 2016 deficit
funding, the Federal Government is looking at
raising over N1 trillion from plugging revenue
loopholes as pressures mount against the
revenue estimates in the 2016 budget.
This will be coming in addition to plans to raise
N350 billion from recoveries of stolen funds in
the on-going anti-graft war.
The 2016 budget financing plan, according a
Finance ministry source, envisages significant
revenue from blocking leakages expected to yield
over N1.0 trillion during the 2016 fiscal year.
The Nigeria Customs Service, NCS; Nigerian
National Petroleum Corporation, NNPC and the
Nigerian Ports Authority, NPA, are the main
targets for this revenue source.
The breakdown of the revenue side of the
budget with the ministry shows several
unconventional sources of funding for the
budget.
Waste reduction initiatives
Key among them includes a revenue optimising
measure expected to be complemented by
initiatives meant to reduce wastage of public
funds such as the recently established Efficiency
Unit meant to identify and eliminate wasteful
spending, duplication and other inefficiencies
across Ministries, Departments and Agencies
(MDAs).
Other waste reduction initiatives include
engagement of costing experts to scrutinize the
2016 budget proposals with a view to further
improving efficiency. Also, government intends to
extend the Integrated Personnel Payroll
Information System (IPPIS) to all MDAs in order
to maintain a lean payroll.
With a projected 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.
Remittance of independent revenues
In addition, the government intends to
significantly improve the collection and
remittance of independent revenues from
government agencies with the full
implementation of the Treasury Single Account
(TSA).
A Finance ministry source, who said the budget
breakdown would answer all the posers raised by
critics of the budget, explained that the delay in
putting the budget together was as a result of
the difficulties in balancing Nigerian’s
expectations with realities on ground.
One of the key posers the budget elicited was
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.
The crash has already 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 finance ministry source also indicated 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.
Poor budgetary allocations to anti-corruption
agencies
The budgetary provisions for anti-corruption war,
according to some analysts, however, appear
inconsistent with the hard line position of
President Muhammadu Buhari as only a marginal
3.1 per cent increase was effected in their
budget while many of them had their allocations
significantly slashed, thus strengthening the
concern of those routing for plea bargaining
option.
Only four of the total nine federal agencies
involved in anti-corruption activities got
increased budget.
One of them with major increase in its budget
was Fiscal Responsibility Commission, FRC, at
N494 million, about 47 per cent increase from
N336.8 million it received in last year’s budget.
Other major increases were for Bureau of Public
Procurement, BPP, and Nigeria Extractive
Industries Transparency Initiatives, NEITI, which
had a 40 per cent increases each receiving N1.4
billion against 2015 amount of N1.0 billion.
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