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Non-oil revenue declined by N329bn in H1 2014

By on December 27, 2014

The Federal Government recorded a decline of N329.79bn in gross non-oil revenue receipts in the first six months of this year to N1.08tn from the half year estimate of N1.48trn, according to figures obtained from the Budget Office of the Federation.

The 2014 second quarter budget implementation report jointly signed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Director-General, BOF, Dr. Bright Okogu, stated that the N1.48tn represented a decline of 23.25 per cent over what was projected for the period.

A breakdown of the N1.08tn non-oil revenue receipts showed that the sum of N513.55bn was collected in the first quarter of the year, while the balance of N574.94bn was collected in the second quarter.

A copy of the report, obtained by our correspondent in Abuja, attributed the decline by N329.79bn to the slow pace of economic activities witnessed during the period.

It explained that the receipts on all the non-oil revenue items were below their respective estimates.

For instance, the report stated that Value Added Tax of N407.95bn, Company Income Tax of N422.63bn and Customs and Excise Duties of N257.91bn fell short by N14.78bn (3.5 per cent), N70.5bn (14.3 per cent) and N133.28bn (34.07 per cent), respectively when compared with their projections for the half-year.

It also stated that the inability of both the revenue generating and collecting agencies to collect and remit the revenues on time was a major factor that affected the non-oil revenue performance.

However, the government, through the report, expressed optimism that the trend would improve in the subsequent quarters of the year.

It said, “The gross non-oil receipts in the first half of the year amounted to N1,088.49bn, indicating a shortfall of N329.79bn (or 23.25 per cent) below the half-year estimate of N1,418.27bn.

“The outcome also reveals that receipts on all the non-oil revenue items were below their respective estimates.

“Value Added Tax of N407.95bn, Company Income Tax of N422.63bn and Customs & Excise Duties of N257.91bn, respectively fell short by N14.78bn (or 3.5 per cent), N70.5bn (or 14.3 per cent)and N133.28bn (or 34.07 per cent) when compared with their projections for the half-year of 2014.

“In the last couple of years, the government, through the Budget Office of the Federation and the Federal Ministry of Finance, had undertaken a number of measures aimed at improving non-oil revenue collection and payment to the treasury.”

Okonjo-Iweala had while speaking on the need to diversify the economy away from oil said the Federal Government would block existing leakages and loopholes in order to generate more revenue.

Another area that will help boost revenue, according to her, is the strengthening of tax administration to boost non-oil tax collections.

She said, “On the revenue side, a lot of work was already underway prior to the fall in the price of oil to improve non-oil revenue generation.

“This is crucial as many agencies have not been remitting surpluses to the treasury as they should. In this regard, I recently met with managing directors of banks to ensure their collaboration and compliance.

“Still on the revenue side, we are looking at our policies on investment incentives, and waivers and exemptions, and are working with the NIPC to stem the tide of abuses.

“Over 30 per cent of companies operating under the pioneer status abuse their tax exempt status. We shall also look at Customs to plug existing leakages and loopholes to enhance revenue generation.”

The minister lamented that only 25 per cent of Small and Medium-scale Enterprises were registered taxpayers, noting that remedying that would broaden the tax base.

Okonjo-Iweala said independent auditors in Nigeria only completed three to five audits a year compared to 50 a year in Angola.

Speeding up audits, she added, would help improve tax collections.

 

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