BY VICTORIA ONU, ABUJA
Facts have emerged as to how the Federal Government lost a whopping N780bn to import waivers granted in the 2020 fiscal period by the Nigerian Customs Service.
The amount is contained in a Fiscal Strategy document obtained from the Ministry of Finance, Budget and National Planning.
The N780bn lost to waivers represents about 49.92 per cent of the N1.56trn revenue, which the Nigerian Customs Service generated in 2020.
Analysis of the Report showed that 26.2 per cent of the waivers was granted for gas oil; 16.6 per cent on generators; 9.08 per cent was granted on wire, cable, plaited bands and copper; while 5.55 per cent was granted as waivers for motor spirit.
In terms of country of supply, five countries accounted for about 86 per cent of total customs relief with China accounting for nearly two thirds of total relief granted.
Similarly, Netherlands, Togo, Benin and India are the other top sources of supplies benefitting from the reliefs.
The report added that about 40 per cent of the total tax relief on imported goods was the relief granted on import duties, the Common External Tariff Levy (CETL), which accounts for nearly 30 per cent of the tax relief.
The document added that 23 per cent of the tax relief was granted through Value Added Tax.
“Preliminary estimates amounted to N780bn, comprising N600bn from waivers of Import duties and N180bn from VAT on Import duties,” it stated.
The amount lost as revenue from import duty waivers is coming at a time when the Federal Government is battling to generate the much needed funds to finance its budget.
Findings revealed that the inability of the Federal Government to effectively fund the capital components of the annual budgets was due to revenue shortfall.
Economists told The Point that the annual revenue shortfalls could be largely attributed to the disproportionate reliance of the Nigerian economy on crude oil.
They advised the Federal Government to focus on expanding its revenue sources in order to generate adequate revenue to finance capital projects for the benefit of the country’s economy.
They explained that the revenue projections contained in the annual budgets were largely based on crude oil prices.
The Chairman, Chartered Institute of Bankers of Nigeria, Prof. Uche Uwaleke, lamented that whenever the government recorded a revenue shortfall, the capital component of the budget suffered while the recurrent expenditure was prioritised.
He said, “Prioritising capital projects will create job opportunities, reduce unemployment, reduce inflation via increased output, enhance ease of doing business and foreign investments, and strengthen the naira value.
“In short, doing so will facilitate economic growth and development generally.”
The Lead Director, Centre for Social Justice, Eze Onyekpere, urged the Federal Government to broaden its revenue sources in order to raise adequate revenue to finance capital projects.
He said, “Generally, our revenue projections have severally missed the mark over the years.
“The projections and forecasts suffer from lack of realism. In 2016, revenue projections fell short by 23 per cent; in 2017,it fell short by 47.73 per cent and in 2018, by 45 per cent.
“This indicates that overall, a good part of our revenue projections has not been based on empirical evidence.”
“Further, if projected revenue in 2018 was N7.1trn and we missed the mark by 45 per cent and have also missed the mark by over 30 per cent in 2019, the further increase in projected revenue to N8.15trn in 2020 could also not be achieved,” Onyekpere argued.
