According to the federal government, its goal for the fiscal year 2024 is to reach a 25% revenue to GDP ratio.
This was said on Wednesday by Wale Edun, the Coordinating Minister of the Economy and Minister of Finance, when he opened the Federal Inland Revenue Service’s (FIRS) 2024 strategic management retreat, which was taking place in Abuja.
He noted that borrowing is not the best option given the global trend of high and steady interest rate increases.
According to him, the focus is on equity and the mobilisation of domestic resources rather than loan finance.
“Re-imagining Tax Administration for Equity and Economic Growth” is the retreat’s theme.
According to the minister, the Fiscal Policy and Tax Reform Committee has a goal to raise the total raw revenue—that is, the sum of tax revenue and revenue from government-owned businesses—from the current 15% of GDP to almost 25%.
“We have decided to prioritise the mobilisation of domestic resources over costly debts. Because of this, the 2024 budget expects the FG’s internally-generated income (IGR) to increase by 77%. As a result, it is imperative that those government-owned businesses take up the challenge of adhering to the Fiscal Responsibility Act’s restrictions immediately.”
“Before, we had very low taxes—less than 10% of GDP. We anticipate that, in collaboration with the tax reform committee, you will be able to raise our tax to GDP ratio to 18% within the next few years, as other African nations are achieving far greater results. I’m hoping you’ll be able to beat that amount,” Edun stated to the FIRS.
“Taking a World Bank loan is about getting our own share as a member of the World Bank Group; our own share of concessionary financing, the International Development Association financing, which is virtually free money of one or two percent for 40 years,” Edu stated in reference to borrowing from the World Bank.
“It is offered as a guarantee of support for the current administration’s initiatives. For this reason, as we attempt to secure a $1.5 billion financing from the World Bank, we are searching for unrestricted funding that will be provided, not for a project in the fields of agriculture, education, or health. The government can use the money to its discretion in any sector of the economy because it directly ends up in the balance of payments.”
“When you receive that, it serves as a signal to the rest of the world that you are doing the right thing and that the international community should back you.”
