The Federation Account has seen a substantial increase in revenue inflow since the removal of subsidy, rising from an average of ₦650 million per month to over ₦1 trillion in the past four months, according to Mr. Wale Edun, the Minister of Finance.
The minister made this statement on Monday in Asaba during the commencement of a four-day retreat organized for members of the Federation Account Allocation Committee (FAAC).
Mr. Okokon Udo, representing the minister as the Permanent Secretary of Finance, Special Duties, stated that the government had long acknowledged the unsustainable nature of petroleum subsidy.
The subsidy system, he explained, had reduced revenues that could have been allocated to fund important expenditures that were essential to the well-being of the populace.
The minister stated that the current administration was cognizant of the needs and welfare of Nigerians and affirmed its commitment to continuing the implementation of policies that prioritize the well-being of the populace.
‘We all know that achieving tax revenue to Gross Domestic Product (GDP) target of 22 per cent and tax to GDP of 18 per cent by 2026 are parts of the cardinal objectives of this administration.’
‘However, in doing that, we appreciate the need not to overburden the taxpayers by introducing so many new taxes.’
‘What is necessary to be done is to broaden the tax base, simplify, and streamline tax administration for ease of collection,’ he said.
Edun added, ‘Among the prior activities of this government after coming into office was the constitution of a Presidential Committee of Fiscal Policy and Tax Reforms.’
‘The committee has submitted an interim report that is full of optimism’.
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According to the minister, the present administration was not ignorant of the severe challenges encountered by Nigerians due to the elimination of fuel subsidy and the unification of exchange rates.
He assured that the sacrifices made by the people would never be without purpose.
‘The government is bent on ensuring that the economy bounces back to normal as we continue to consolidate recovery efforts while focusing on achieving inclusive economic growth and development,’ he added.
According to Edun, the administration under the leadership of Bola Tinubu has established comprehensive palliative measures to mitigate the economic effects of the ongoing reforms.
Regarding the theme of the retreat, “Creating a Resilient Economy through Diversification of the Nation’s Revenue,” the minister expressed approval of the choice, stressing its suitability.
Furthermore, Edun highlighted that the retreat clearly underscored the imperative to diversify the nation’s economy.
During his opening address, Governor Sheriff Oborevwori of Delta called upon the federal government to exhibit political resolve by establishing the requisite policy and institutional framework to diversify the nation’s economy.
Represented by his deputy, Sir Monday Onyeme, the governor stated that diversifying the nation’s economy from its over-reliance on crude oil revenue would require concerted efforts in other key sectors, as there was no quick fix.
The speaker emphasized that the country’s economy needs to diversify beyond just words and take tangible steps towards promoting non-oil exports like agricultural products, manufactured goods, and services, while also expanding the revenue base.
Delta, as affirmed by Oborevwori, is taking the lead in economic diversification by instituting a Trade and Export Unit to actively propel the process of transforming economic diversification into a practical reality.
He observed that some perspectives argue that the discovery of crude oil, which resulted in the neglect of agriculture and other revenue-generating non-oil sectors of the economy, was perceived as a curse.
According to Oborevwori, the country had failed to effectively manage its oil wealth, and he expressed worry over the fact that the oil sector only contributed between five to seven percent of the nation’s GDP.
He noted that the non-oil sector, particularly agriculture, agribusiness, manufacturing, and small-scale enterprises, contributed 93 to 95 percent to the country’s economy, although the oil and gas sector remained the primary source of public revenue.