Reps adopt Buhari’s MTEF/FSP

*Want granting of waivers reduced

*Seek higher taxes on luxury goods and services

By Henry Omunu, Abuja

The House of Representatives on Wednesday passed the Medium Term Expenditure Framework and Fiscal Strategy Paper 2019-2021 with a benchmark of 2.3 million barrels of crude oil production per day target.

The House passed the two policy documents as proposed by President Muhammadu Buhari, even as Speaker Yakubu Dogara urged the federal government to shelve its plan of heavily taxing Small and Medium Enterprises (SMEs) if employment generation is a factor for economic development. 

Other benchmarks adopted by the House, include $60 per barrel of crude oil, N305 to $1 as official exchange rate, while new borrowing to fund the budget deficit for 2019 was fixed at N1.6 trillion.

This followed the adoption of the report of the House joint Committees on Finance, Appropriations, Aids, Loans and Debt Management, Legislative Budget and Research and National Planning and Economic Development on the MTEF and FSP documents.

Chairman of the House Committee on Finance, Rep. Babangida Ibrahim, in his presentation also said the joint committee recommended that the government increase the tempo of collectable revenues in all Ministries, Departments and Agencies (MDAs) with a view to reducing the budget deficit.

On the N305 to $1 exchange rate, he said that “the CBN should be encouraged to vigorously develop strategies that would strengthen the Naira and bridge the gap between the official and parallel market rates.

“On debt management/new borrowing, the joint committee adopted the recommendation of N1.64 trillion as new borrowing to fund the budget deficit and advised relevant agencies to continue exploring ways of generating additional revenues for government to bring down the fiscal deficit.

“Also, the federal government should harness the potentials of the Federal Ministry of Mines and Steel Development in terms of revenue generation to minimize the level of new borrowing.

“The federal government should consider reducing the granting of waivers and exemptions while ensuring that the Nigerian Customs Service personnel at all oil terminals for accountability, and the Federal Inland Revenue Service (FIRS) should consider increasing tax on luxury goods and services.

“20 per cent operating surplus to be remitted by government owned enterprises should be deducted at source.

“Special Intervention that the sum N500 billion is adopted and enjoined the cooperation of relevant committees and other relevant Ministries, Department and Agencies (MDAs) in ensuring that the funds are judiciously utilized to provide a positive tangible impact of the funds on the Nigerians.”

Dogara in his remarks said the government should rather consider lowering tax on SMEs to boost the economy.

According to him, increasing tax on SMEs would lead to unemployment as the sectors have the capacity to create more employment if the economic environment is conducive.

On the other hand, he said lowering tax would lead to more employment that will translate to more taxable people for the government, thereby boosting government revenue and economic activities.

The bill was passed without any dissenting voice when it was put to vote by Speaker Dogara, who chaired the Committee of Supply.