Nigeria will borrow less by blocking revenue leakages – Finance minister

Minister of Finance, Budget and National Planning, Zainab Ahmed, has said Nigeria will borrow less and have more money to finance its capital projects if it is able to block areas of revenue leakage.

She also said one of the best ways to reduce the nation’s debt burden was through collection of more taxes.

She said this at a workshop on tax expenditure organised by the Economic Community of West African States (ECOWAS) Commission in Abuja, on Tuesday.

The workshop was aimed at looking at directives on harmonisation of tax expenditure management practices and the monitoring and evaluation of tax transition in ECOWAS member states.

The minister, who was represented at the event by the Director, Technical Services in the Finance ministry, Fatima Hayatu, said the issue of tax expenditure was of great concern for the government.

In the Federal Government’s fiscal performance report, the cost of servicing debt surpassed revenue by N310 billion in the first four months of 2022.

The minister, however, maintained that the debt burden is not beyond what the government could handle.

“If we have more taxes and redirect the taxes to the right fiscal sectors of our economy, we will reduce our debt burden,” Ahmed said.

“It is not as if the debt is beyond what the government can handle. If you look at the ratio of the debt to the Gross Domestic Product (GDP), I think the government is doing well.

“The debt is not something that cannot be surmounted. The programme today is to block leakages where the taxes are being diverted. So, if we block leakages, and if it is transparent, Nigeria will borrow less and we will have more money to finance other sectors”.

Ahmed said reforms in tax expenditure management were gaining traction in Nigeria, a development that had resulted in the continuous development of in-house capabilities and internal restructuring in agencies for greater efficiency.

She said the government would commence the “rationalisation of tax exemptions by phasing out antiquated pioneers and other tax incentives” for matured industries.

The minister said contrary to what was obtained in the past, the country was now reaping the benefits of tax exemptions and concessions given to small businesses.

She said, “A lot has changed; the system is more transparent and tax expenditure that the government has given, which is tax for bond, is to encourage ailing and infant industries to be able to do more and employ more youth.

“I am glad to say that the tax expenditure that the federal government has been giving has encouraged industries and manufacturers to stay afloat even with the COVID-19 pandemic and also to say that they have been able to keep their staff. That, to us, is an achievement because we don’t want people to lose their jobs which would reduce the insecurity we are facing.”