2017 budget: FG says it recorded 49% non-oil revenue shortfall

The Federal Government recorded a 49 per cent shortfall in non-oil revenue needed to finance the 2017 budget, figures obtained from the Budget Office of the Federation have revealed.

The figures are contained in the Medium Term Expenditure Framework which was prepared by the Ministry of Budget and National Planning and approved by the Federal Executive Council.

The MTEF sets out the underlying assumptions for the 2018 budget and presents an overview of consolidated debt and potential fiscal risks.

In the document, a copy of which was obtained by our correspondent in Abuja, the Federal Government said both oil and non-oil revenue performed below their target within the first six months of this year.

For instance, the fiscal document stated that while oil revenue sources underperformed below its targeted benchmark by nine per cent, non-oil revenue fell below its target by 49 per cent.

It said as of June this year, the sum of N2.43tn out of the total revenue of N2.54tn projected for the first half of the year was realised.

From the realised revenue, it added that oil revenue was N960.87bn against the target of N1.06tn, implying a shortfall of nine per cent.

It said the total non-oil revenue, which included Corporate Income Tax, Value-Added Tax, Customs revenue, federation account levies and special account balances, fell short of target by 49 per cent.

The document noted that the Customs revenue was the best performing non-oil revenue category with N132.97bn.

It stated, “The projected revenue for the 2017 fiscal year was N5.08tn, based on the parameters adopted in the 2017-2019 MTEF. As of June 2017, N2.42tn of total revenue projected for the first half of the year was realised.

“Oil revenue was N960.87bn against the pro rata of N1.06tn, implying a shortfall of nine per cent. Total non-oil revenues, which include Corporate Income Tax, Value-Added Tax, Customs Revenues, Federation Account Levies and Special Account balances, fell short of target by 49 per cent.”

According to the document, as the fiscal year progresses, it is expected that non-oil revenues, especially the CIT, will improve due to the seasonality in remittance of the revenue items.

It noted that the slow pace of recovery in the non- oil revenue was expected to gain momentum as improvement in tax collection efforts and policies to improve the environment for doing business in Nigeria would yield results and spill over to the wider economy.

“As oil production further increases due to the relative stability in the Niger Delta region, oil revenues are expected to improve,” it added.

The Minister of Finance, Mrs. Kemi Adeosun, on Thursday said that the Federal Government was carrying out reforms in the nation’s tax system to boost tax revenue.

She said at six per cent, the country’s tax to Gross Domestic Product ratio was one of the lowest in the world, adding that efforts must be increased to correct the trend.

“Our tax to GDP ratio is just six per cent; we are reforming our tax administration. We have already started getting submissions from individuals and companies that don’t pay taxes under the Voluntary Assets and Income Declaration Scheme and if we can move our tax to GDP ratio from six to initial target of 10 per cent and ultimately to 15 per cent, it would help us improve the economy,” she added.