•Insists focus is now on domestic resource mobilisation
The federal government said its target is to achieve a 25 per cent revenue to gross domestic product (GDP) ratio in the 2024 fiscal year.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated this on Wednesday while declaring open the 2024 strategic management retreat of the Federal Inland Revenue Service (FIRS), being held in Abuja.
He said given what is happening around the world – high and sustained increase in interest rates – borrowing is not the way to go.
He said emphasis is on domestic resource mobilisation and equity as opposed to debt financing.
The theme of the retreat is ‘Re-imagining Tax Administration for Equity and Economic Growth’.
The minister said there is a plan under the Fiscal Policy and Tax Reform Committee to increase the total raw revenue, which is tax revenue plus the revenue that is earned from government owned enterprises to about 25 per cent of GDP from its current 15 per cent.
“We have resolved not to focus on expensive debts, but on domestic resource mobilisation. That is why the 2024 budget anticipates a 77 per cent increase in the internally-generated revenue (IGR) of the FG and what needs to be done now is for those government owned enterprises to accept the challenge to live within the regulations of the Fiscal Responsibility Act.
“Our tax to GDP was previously very low, lower than 10 per cent. Other African countries are doing much better, we expect that working with the tax reform committee, you will be able to move our tax to GDP Ratio to 18 per cent in the next couple of years. I hope that you will be able to surpass that figure,” Edun told the FIRS.
Speaking on borrowing from the World Bank, Edu said: “Taking a World Bank loan is about getting our own share as a member of the World Bank Group; our own share of concessionary financing, the International Development Association financing, which is virtually free money of one or two per cent for 40 years.
“It is given as a seal of approval for the policies of the government of the day. That is why in seeking to process a $1.5 billion financing from the World Bank, we are looking for free money that is going to be given not for a specific project, in agriculture, education or in health. It is money that comes straight to the balance of payment for the government to spend as it sees fit in any given area of the economy.
“When you get that, it is a signal to the rest of the world that what you are doing is on the right track and should be supported by the international community.”
