Isaac Anumihe, Abuja
As a way to encourage investment in the Nigerian economy, Federal Government has promised tax incentives for investments in infrastructure and capital markets. The government did not, however, give details of the investment.
The Minister of Finance, Mrs Zainab Ahmed, made the disclosure recently in Abuja when she fielded questions on the 2020 Budget. She said that apart from reforming the domestic tax laws, the government would send a reform bill to the national assembly to instituionalise the policy.
The bill, she said, would support micro, small and medium businesses in line with the government’s ease of doing business reforms.
Also, the government, said that the reform shall introduce new performance management frameworks to revenue ratios.
“Our fiscal reforms shall introduce new performance management frameworks to regulate the cost to revenue ratios for government- owned enterprises which shall come under significant scrutiny. We will reward exceptional revenue and cost management performance while severe consequences will attend failures to achieve agreed targets,” she said. According to her, when passed, the bill would promote fiscal equity by mitigating instances of regressive taxation. The bill will equally reform domestic tax laws to align with global best practices.
Recall that the N2.18 trillion deficit in the 2020 Budget is expected to be financed mainly by new foreign and domestic borrowings, privatisation proceeds, signature bonuses and draw-downs on loans secured for specific purposes. It will further add to the already high debt profile of $81.274 billion.
According to experts, the deficit is 21.10 per cent of the overall expenditure of N10.33 trillion.
Above all, the deficit is 26.7 per cent of the projected revenue of N8.155 trillion. It was considered that by the end of June 2019, a deficit of N1.35 trillion had been recorded in the implementation of the 2019 budget, representing 70 per cent of the budgeted deficit for the full year.