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» » FG SET TO INCREASE VAT AS IT PLANS TO INJECT N350BN INTO THE ECONOMY
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The federal government has said that it will inject N350 billion budgeted expenditure to revamp the Nigerian economy in the next few months. 

It will equally work in collaboration with the state governments to adopt a plan for the gradual increase of value added tax (VAT) on goods and services.

These were some of the decisions taken at the end of a two-day retreat for governors of the 36 states of the federation and members of the National Economic Council (NEC) at the Presidential Villa in Abuja.

The Nigerian economy has been hit by dwindling crude oil prices, leading to a shortage of foreign exchange, a shrinking economy and spiraling inflation, which have all impacted on the standard of living and impeded the ability of several state governments to pay the salaries of their workers.

Briefing State House correspondents at the end of the retreat, the Minister of Finance, Mrs. Kemi Adeosun, who was joined by the Minister of Budget and National Planning, Senator Udoma Udo Udoma, Zamfara State Governor, Mr. Abdul’aziz Yari and his Anambra State counterpart, Mr. Willie Obiano, said part of the funds would assist in the payment of local contractors who had laid off their staff due to lack of funds.

Adeosun said: “From the Federal Ministry of Finance, in anticipation of the approval of the budget, we have virtually lined up about N350 billion, which we would be pumping into the Nigerian economy in the coming months.

“We explained our rationale and the processes that we have put in place, safe guards to ensure that this money actually achieves the desired objective which is to stimulate the economy.

“We are already discussing with some of the contractors who would be paid these monies and the objective from the overall criteria is how many Nigerians would be re-engaged.

“We are specifically looking at contractors who have laid off staff and how many Nigerians are you going to put back to work as a result of this money that we are planning to release and we believe that this would bring significant economic activities”

She said the retreat deliberated extensively on the drop in revenue and on how it affects the state governments and their ability to pay salaries and meet other obligations.

She said: “The general resolve of the house was that there was a need to bring in more cost efficiency in their operations. In particular, to look at the setting up of Efficiency Units in the states, to rationalise expenditure and of course to increase internally generated revenue (IGR).

“To that end, there was a need to generate data because data are the basis of any revenue collecting efforts.”

Adeosun also said that the federal and states inland revenue services agreed to collaborate on joint audits on revenue, to invest in technologies and other efforts to improve collection.

According to her, there is a need to develop incentives for both federal and states revenue generating agencies to ensure that there is an alignment of interests.

She said the meeting also agreed to educate the masses on taxation in order to expand the tax base and ensure that there is a buy-in in the revenue collection agencies from the populace.

Adeosun said the meeting advised the state governors to rationalise the numbers of commissioners and general political appointees, where possible, in their states and to put in place cost control measures that would be identified and implemented on an on-going basis.

She said: “We also discussed the Universal Basic Education Fund and the need to get legislative approval to change the need for counterpart funding on the part of state governments which we feel is putting them further into debts.

“The goals are to reduce that requirement temporarily to 10 per cent from the current 50 per cent and that would release an estimated N58 billion that is currently un-accessed by the states.

“With that money, we could possibly address around 1,000 of the worst classrooms in each of the 36 states and rehabilitate them and of course this would also create jobs and stimulate economic activities.”

On the salient issues discussed and agreed to at the NEC retreat, the media aide to the vice-president, Mr. Laolu Akande, said participants set up an implementation steering committee headed by Vice-President Yemi Osinbajo.

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