Federal government spent a whooping sum of N1 trillion on subsidy when taken along with the expenses of the NNPC said the Group Management Director of Nigeria National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu [above].
GMD of NNPC who is also double as Minister of State of Petroleum added that the current pricing does need subsidy funding.
Kachikwu, made this known in company of Minister of Finance, Kemi Adeosun, Minister of Budget and National Planning, Senator Udom Udom, newly confirmed Federal Inland Revenue Service (FIRS) Boss, Babatunde Fowler, Director General of Debt Management Office, Abraham Nwankwo, Governor of Central Bank, Godwin Emefiele during an interface on Medium Term Framework Expenditure with the Joint Committee of the Senate and House of Representatives at the Senate wing of National Assembly.
The GMD of NNPC informed the joint committees that from August this year, NNPC had been exceeding two million barrels daily production through stringent monitoring of production by getting quick fixes to instances of pipelines vandalisation.
In his words:” The current pricing work we are doing had shown that there shouldn’t really be subsidy. The government doesn’t need to fund subsidy.
There is energy around the removal of subsidy. Most Nigerians we talk to today, would say, that’s where to go. I have since left the dictionary of subsidy by going to price modulation which is a bit more technical. Price of refined products today is N87. It was N97 before it was removed and we really have to go back to that because we don’t really have the finance to remove it.
“There are lots of safety barometer between the N87 and N97per litre regime between which government does not have to fund subsidy. Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work. It is when that mechanism fails that we will begin to look at a total subsidy exit. We believe we could achieve that.
In his presentation, the Chairman FIRS, Babatunde Fowler while presenting the proposed revenue to be generated from taxation said FIRS has the capacity to rake in the sum of N2 trillion in 2016 from Value added tax alone.
He told the Senate that while plucking loopholes in the Nigerian tax system to prevent unnecessary leakages, FIRS has started working towards capturing not less than 5000 corporate accounts in its tax profile for increased tax collection in the next few years.
He said already the FIRS had identified more than 800 corporate accounts that were, hitherto not paying tax in Nigeria, stressing that already the government agency would ensure that not less than 500 of such account are mobilized to be regular tax payers.
He said FIRS has resolved to widen its tax space with preparedness to increase tax compliance level in Nigeria by 90 percent, the first of its kind in Nigeria.
The Minister of Finance, Kemi Adeosun also told the Senate that the 2016 budget will focus more on Capital projects to catalyse the growth of the economy.
She said part of the efforts by the government is to ensure that all revenue generating agencies would be made to generate surplus, while none of them would be allowed to spend more than what the government will approve for them in 2016.
The minister said although the Federal Government is expected to borrow to finance the 2016 budget, no part of the amount to be borrowed would be spent on recurrent, but essentially capital
The minister admitted that the government would pay over N1tn to fund petrol subsidy this year, which according to him, included the N670bn paid to the major oil marketers for the 48 per cent of the product imported, and the 52 per cent brought in by the Nigerian National Petroleum Corporation.
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