The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has insisted that the government was not wrong in increasing the Value Added Tax VAT, saying its the only panacea that the federal government can meet its financial obligation up to 80 % revenue.
Ahmed made this claim while making a public presentation of the 2020 budget proposal, she disclosed that for the first half of the year 2019, the actual aggregate revenue for 2019 was N2.04 trillion, which was 58 per cent of the prorate target.
She revealed out of the figure, oil revenue accounted for N900 billion, custom and exercise duty N184.10 billion, Company Income Tax (CIT) N349.11 billion, and Value Added Tax (VAT) N81.36 billion.
According to the Minister, she doubts if the country will meet its target of the N8.33 trillion at the end of the year, saying this has necessitated the idea of increasing the VAT to boost the revenue generation of the government.
She disclosed that it is obvious the government will find it difficult to meet its 80% target of the 2019 budget, this reality has pushed the government to redirect its energy on how it should mobilise resources to meet its obligation.
“Releases did not start until late July and as at last week we had scheduled and releases are now up to N650 billion.” The mister said.
The Minister revealed only N294.63 billion was released for capital expenditure as at the end of September, however, the target is to be able to reach N900 billion by the end of December 2019.
She further explained that of the total appropriation of N8.92 trillion, N3.39 trillion had been spent by June 30, as against the prorated expenditure budget of N4.58 trillion, representing 76 per cent performance.
The 2019 budget was predicated on oil production of 2.3 million barrels per day at 60 dollars per barrel and an exchange rate of N305 per dollar.
