The Federal Government has spent over N1.2 trillion in the last 12 months on capital projects in the country and pledged to continue to prioritise infrastructure spending. The Minister of Finance, Mrs Kemi Adeosun, disclosed this yesterday at the Nigerian Stock Exchange, NSE and Bloomberg CEO Roundtable Session in Lagos.
While commenting on the topic "Innovating out of Nigeria's recession: Exploring new paradigms for Nigeria's economic growth," she said, "We will continue to prioritize infrastructure spending. In the last 12 months, we have spent approximately N1.2 trillion on capital projects. On our road, spending was N200 billion in 2016 which compares to N19 billion in 2015 while transport and aviation received N143 billion compared to N6 billion in 2015.
We intend to revive Public Private Partnership (PPP) in Nigeria and trying to revive existing and failed PPP projects. Nigeria's private sector is extremely efficient, creative and resilient but it needs predictability in policy. We will introduce new assets clause of guaranteed instruments that will provide adequate safeguard for the protection of private capital."
According to her : " For the past two years, the road has been rough but the worst is over and we have an opportunity to make sure we don't go back to where we are coming from the way we did in the past.
"Oil is only 10 per cent of our economy but it represents up to 60 per cent of our revenue which is why when the price of oil fell, we had a double impact. We lost revenue and government found it difficult to really meet its needs.
The minister also said that the Federal Government has signed Global Convention on base erosion and profit shifting Act, which do not allow companies that generate profit in Nigeria to evade taxes by shifting this profit to countries or jurisdiction where little or no tax is payable.
She said that Nigerians do not pay tax as expected, stressing that revenue mobilization was critical to the success of Nigeria's economic reform agenda.
According to her, "To do this, we must amend Nigeria's low level of tax compliance. Our tax to Gross Domestic Product, GDP of 6 per cent suggest widespread ignorance of our tax laws. We have just 14 million active tax payers out of an estimated 69.9 million economically active in Nigeria. Out of that 14 million, majority are Pay As You Earn, P.A.Y.E. Among those paying tax, there is widespread malpractice that results in only half of the actual income being subjected to tax."
Continuing, she said "On Wednesday, Federal Executive Council, FEC granted permission to the Ministry of Finance to sign the Global Convention Act on base erosion and profit shifting which does not allow companies who generate profit in Nigeria to evade taxes by shifting these profits to countries or jurisdiction where little or no tax is payable. These practices harm Nigeria and they must stop. Nigeria's tax to GDP is one of the lowest levels in the world. We need a sustainable revenue base that will deliver. It is well documented that in the entire nation, only 214 people pay tax of over N20 million and they are all in Lagos State.
"Our low tax to GDP compares negatively to other countries such as Ghana which is 16 per cent, and South Africa 27 per cent .If we want to grow, we must address these issues and do so aggressively and to do that we may have to step on big toes because we really have no choice."