A group of analysts at FBNQuest have said Federal government non-oil revenue collection stood below proportion budget figure of N467 billion for 2018 budget.
The Lagos based research firm noted that the Central Bank of Nigeria (CBN)’s latest monthly report for November noted that the federally-collected revenue still runs well behind budget.
According to FBNQuest research latest report, “For the 13 months through to November, total non-oil collections (gross) did not once reach the pro rata budget figure of N467billion: the closest they came was N434billion in July when receipts from companies’ income tax (CIT) tend to peak.
“The take from CIT hit the target twice in the period, and from customs and excise five times. After statutory deductions, these revenues are transferred to the federation account for distribution to the three tiers.
They explained that figures cited by Zainab Ahmed, the federal finance minister, at a function in late January are instructive.
According to FBNQuest report, the gross oil revenue/oil Gross Domestic Product (GDP) ratio stood at 39.0per cent, whereas the comparable figure for the non-oil economy was just 4.2per cent.
The report explained that “the federal government position on Value Added Tax (VAT) rates we have often mentioned but the minister also cited a customs and excise revenue/GDP ratio of 4.1per cent, which she compared with 15.0per cent in Ghana and 19.5 per cent in Kenya.
“The distance still to cover is clearly large, and caution is required on the journey to follow the right signposts. We learn that a national database has captured more than 33 million taxpayers but probably more relevant is that only about 10 million have been registered in a labour force of 77 million according to a report from the IMF.
“A note by Andersen Tax suggests how the government can start to collect tax from the SMEs that dominate the labour force. The idea is that, rather than demand documents that are often not available, the authorities could levy a presumptive tax based upon business permits or trading license fees. This has been the successful practice in Kenya and Tanzania.”
“There has been progress in the tax collection, albeit from a low base at a slow pace. Ahmed told the gathering that the tax revenue/GDP has risen from six per cent to seven per cent.”