Taminu Yakubu, the Director-General of the Budget Office of the Federation, has called on Nigerians to embrace the ongoing tax reforms, stressing that a willingness to do things differently could lead to positive outcomes for the country’s economic turnaround.
In an interview with ARISE NEWS on Thursday, Yakubu emphasised the importance of supporting the proposed tax bills currently before the National Assembly. He urged Nigerians to temper their pessimism with optimism, particularly as the country grapples with long-standing issues related to its tax regime.
According to Yakubu, the Nigerian taxation system is largely based on colonial-era arrangements, with the most recent reforms dating back to 1971. He noted that now is the time for significant changes, especially as both the National Assembly and the Presidency are aligned in their support for these reforms.
“You need to give the new reforms, particularly, the tax bills that are before the national assembly. We need to temper pessimism with optimism that is backed by concrete plans. We have a tax regime that is largely a product of the colonial taxation arrangement and I think the latest that was done was in 1971.
“But it is one of the major assumptions and we think that because the National Assembly and the president are from the same party, there is greater understanding on the part of the opposition party that this reform is necessary for Nigeria to achieve a rapid economic turnaround.
“I just want you to give the chance that doing something differently will generate a different outcome.”
He noted that although there might be resistance, especially from opposition parties, the understanding that these reforms are critical for Nigeria’s economic growth is growing.
Yakubu pointed to the recent Federation Account Allocation Committee (FAAC) disbursement, which saw record allocations to the federal, state, and local governments. He underscored that savings from the withdrawal of the fuel subsidy are beginning to have a positive impact on the nation’s finances.
“Already we saw that in the last distribution of FAAC, both the federal govt, the state, and the local government had never received as much, so the savings from the withdrawal of the fuel subsidy is beginning to be captured in the treasury.”
Yakubu also highlighted the significant challenges and opportunities in Nigeria’s mining sector, which has seen a modest yet promising contribution to the country’s revenue stream.
While the mining sector’s current contribution remains relatively small, Yakubu revealed that recent efforts have led to a notable increase in revenue, with the sector generating N30 billion in just one year. He acknowledged that mining is a long-term venture, and the country must pursue sustained reforms to reduce its dependency on oil revenue.
He further explained that challenges such as the high cost of production in the upstream oil sector have limited Nigeria’s oil revenue. However, efforts are underway to reduce these costs and boost production. Yakubu also mentioned ongoing plans for import substitution and the accelerated export of refined petroleum products as part of the country’s broader strategy to increase non-oil revenue and reduce fiscal dependency on crude oil.
“The contribution of mining to the country’s revenue stream is insignificant. But we have seen that from a new contribution, we were able to get as high as N30 billion naira in just one year. Mining is a long-term proposition.
“The budget is built around what we can do in the short to medium time that would make a difference and we cannot run away from the fact that it will take sustained reforms, sustained efforts to take us significantly away from the dependence on the oil revenue. We were not getting as much as we could because of the high cost of production in the upstream which I mentioned earlier, would be brought down substantially.
“We are also increasing the output level and again, the plans that we have for import substitution and accelerated export of refined petroleum products are meant to generate more revenue that will help us to fund the budget alongside the expectation which again has been proven by facts on the ground that non-oil sector is picking up in terms of its contributions to the revenue profile of the country.”
On the issue of Nigeria’s debt levels, Yakubu acknowledged that the country’s debt burden has constrained the administration’s capacity to undertake further development projects. However, he clarified that borrowing remains a necessary tool for financing the country’s economic development, provided that it is used for investments that enhance the nation’s productive capacity.
He emphasised that borrowing should not be viewed negatively as long as the funds are directed toward creating goods and services that generate wealth for future repayment.
Chioma Kalu
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