The coordinating minster of the economy Dr Mrs Ngozi Okonjo Iweala gave an instructive insight into how the government plans to raise additional revenues in the light of the current slide in oil prices. She gave this insight in a speech at the fourth edition of the Capital Market Committee retreat in Abuja on Thursday. The Punch Newspaper carried the news and I culled up the key details below.
“On the revenue side, a lot of work was already underway prior to the fall in price to improve non-oil revenue generation.
“There are also ongoing efforts to ensure that all agencies of government comply with all extant laws relating to their remittance of surpluses to the treasury, including the strict implementation of Mr. President’s directive on agencies and parastatals’ remittances to the treasury.
“This is crucial as many agencies have not been remitting surpluses to the treasury as they should. In this regard, I recently met with the managing directors of banks to ensure their collaboration and compliance.
“Still on the revenue side, we are looking at our policies on investment incentives, and waivers and exemptions, and are working with the National Investment Promotion Council to stem the tide of abuses.
“Over 30 per cent of companies operating under pioneer status abuse their tax exempt status. We shall also look at Customs to plug existing leakages and loopholes to enhance revenues.
“We are also introducing surcharges on certain luxury goods in the country, not only to raise additional revenue but also to ensure that the better-off in our society contribute a little bit more to easing the pain resulting from the current economic headwinds.
“In summary, our aim on the revenue side is to raise an additional N480bn ($3bn) over the 2014 base in the next three years.”
Investors may have to look at the areas such as Pioneer status, taxes on alcoholic drinks and how they affect stocks in those sectors. The Brewery and Oil and Gas Sectors come to mind.
