Experts wants, FIRS, Customs widen revenue to tackle high debt profile

Owing to the nation’s high debt profile, some financial experts in the country have tasked the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS) to intensify action in revenue collection. They also, urged the Federal Government of Nigeria to widen the nation’s tax base and sell identifiable productive assets to tackle the rising debt profile. As at the third quarter of 2018, the Nigeria’s debt profile stood at N22.43 trillion, and financial stakeholders, such as the Head of Banking and Finance Department, Nasarawa State University Keffi, Prof. Uche Uwaleke, believed that the government needed to widen its tax base to reduce debt profile and increase tax to Gross Domestic Product (GDP) ratio. Uwaleke said that there was the need for the Federal Inland Revenue Service and Nigeria Customs Service to intensify action in revenue collection. This he said was imperative as the six per cent tax to GDP was very low, considering the size of the economy. According to him, the Customs Service should map out strategies aimed at addressing smuggling to boost revenue generation. Uwaleke added that government should identify productive assets for outright sale or privatisation to rake in revenue aimed at reducing the country’s huge debt profile. The expert said it was important for the government to expand the non-oil exports, particularly agricultural products and solid minerals to boost foreign reserve and exchange rate. He also called on the efficiency unit of the Ministry of Finance to address wastage in various ministries to free up funds for other uses. Mr. Sola Oni, a chartered stockbroker said that the mounting debt profile showed that Nigeria spends more than it earns as a country. “There is no crime if a country owes but on what basis is the debt? Is it for consumption or investment? “This is where Nigeria cannot be compared to advanced economies where investment in infrastructure largely accounts for their debt profiles,’’ Oni, also the Chief Executive Officer, Sofunix Investment and Communications said. He said that Nigeria’s debt could be managed by lowering interest rates to stimulate economic growth which had been adopted successfully in some countries such as the U.S. and United Kingdom. “Quantitative easing whereby government sells its securities to control money in circulation can be deployed to reduce its debt,’’ Oni said. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun, said that the current national debt was too high for an economy that depends on one major product. Tella said that devotion of more than 20 per cent of the annual budget to servicing national debt was impacting negatively on the country’s development, particularly provision of basic amenities. “The fact that large proportion of the debt is local provides some safety net, but the loans must be properly utilised and not result in capital flight or mismanagement to create burden on future generations,’’ he said. Motolani Oseni