Nigeria’s Minister of Finance, Budget, and Planning, Zainab Ahmed disclosed that the proposed 2023 budget of N19.76 trillion would have a deficit of N12.43 trillion because N6 trillion is projected as tax and import duty waivers, while fuel subsidy would take a whooping N6 trillion.
The minister revealed this in a review meeting with the Senate Committee on Finance and the heads of revenue-generating agencies on Tuesday in Abuja, ahead of the submission of the proposals to the national assembly for consideration and approval.
Zainab Ahmed also explained that the issue of the budget deficit is a result of debt servicing, adding that tax credits are issued when companies construct projects and the projects are certified and issued certificates by the federal ministry of works.
However, the committee and heads of the revenue-generating agencies expressed concerns about the composition of the proposed budget, stressing that the N12.43 trillion deficit for the 2023 budget and N6 trillion waivers are very disturbing and should be adjusted accordingly.
The chairman of the senate panel, Senator Solomon Adeola, requested that both the projected N12.43 trillion budget deficit and the N6trillion tax and import duty waivers should be critically reviewed downward before sending the proposals to the National Assembly for consideration and approval.
What the Committee is Saying
The committee chairman requested a downward review to N3 trillion as opposed to the outright N6trillion tax and import duty waiver to give room for the reduction of the N12.43 trillion deficit figure. He said:
“The proposed N12.43 trillion deficit for the 2023 budget and N6 trillion waivers are very disturbing and must be critically reviewed. Many of the beneficiaries of the waivers are not plowing accrued gains made into expected projects as far as infrastructural developments are concerned.”
“The NCS should help in this direction by critically reviewing waivers being granted on import duties for some importers just as the FIRS should also review the tax credit window offered some companies without corresponding corporate social services to Nigerians in terms of expected project executions like road construction.”
Considering that a challenging economic outlook–the impact of the Russia-Ukraine war, crude oil theft, insecurity, mounting debt, and continuing infrastructure deficit–beclouds Nigeria, there is no other time to do business unusual than now. A N6 trillion tax waiver and N6trillion subsidy expenditure will seriously weigh on the economy of Nigeria.
