Nigeria’s revenue savings hit N1.071 trillion

Waziri Adio

• FIRS projects N1.8 trillion VAT collection for 2017
Nigeria’s current balance in the Excess Crude Account and the Stabilisation and Wealth Fund stands at $3.9 billion (N1.071 trillion) as at June 2017.

The Nigeria Extractive Industries Transparency Initiative (NEITI) said this is not enough to prepare the country to overcome frequent commodity price volatility and depletion of non-renewable resources.

In an occasional paper entitled, “The case for a robust oil savings fund for Nigeria,” yesterday in Abuja, NEITI Executive Secretary, Waziri Adio, said that there is an urgent need to transfer all revenue savings in the stabilisation fund and the Excess Crude Account into the Nigeria Sovereign Wealth Fund.

It said Nigeria must embrace fully a robust policy to save a portion of oil and gas revenue for the rainy day and for the next generation.

NEITI explained Nigeria’s three oil savings funds to include Sovereign Wealth Fund with $1.5 billion, the Excess Crude Account with $2.3 billion and the Stabilization Fund with N29.02 billion.

According to the agency, in the last 40 years of oil production, Nigeria has extracted about 31 billion barrels of its oil reserves. However, from 1980 to 2015, the country exported crude oil worth about $1.09 trillion, but has a current balance of $3.9 billion dollars as at June 2017 in the three funds.

Adio lamented that in spite of these benefits and the huge revenues that have accrued from oil and gas over the years, Nigeria has one of the lowest natural resource revenue savings in the world.

He maintained that Nigeria needs to “move urgently from our present spend-it-all or even save – and– spend attitude to a real savings culture, otherwise we will continue to be vulnerable to the volatility of oil prices and the eventual depletion of our oil reserves.”

Meanwhile, the Executive Chairman, Federal Inland Revenue Service (FIRS), Tunde Fowler, has projected N1.8 trillion Value Added Tax (VAT) collection for 2017 fiscal year.

Fowler made the budget presentation yesterday at the Senate Committee on Finance budget defence.

He told the committee that the budget was to increase VAT and other non-oil revenue.

He said that VAT is expected to improve from an actual of N828 billion to a budget of N1.8 trillion which is over 125 per cent increase.

Fowler noted that the deployment of the platforms is at no cost to the Service while the consultants will only be rewarded on incremental revenue generated.

He further said the Service proposed to collect the following tax revenue target as derived from Federal Government 2016-2018 Medium Term Revenue Framework (MTRF) for 2017 amounting to a total of N4.89 trillion.

For the budget parameter, the FIRS boss said that the 2017 projected cost of collection of N153.44 billion is higher than the 2016 approval estimate, which stood at N143.90 billion. And that it represents a cost of collection increase of 6.63 per cent on overall projected non-oil revenue including VAT, stamp duties and levy.

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