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Market Digest Nigeria

Politics

Nigeria reaching maximum capacity to borrow, says El-Rufai

Governor Nasir el-Rufai of Kaduna State has raised the alarm that the country has almost reached its maximum capacity to borrow. He said that with the collapse of the crude oil prices, the nation should be more proactive to avoid external shocks.

The governor, who spoke yesterday at the 22nd Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) held in Lagos, said the country should start developing tax extraction capacity and create an effective tax system that influences structural change.

El-Rufai, who spoke on “Taxation and Economic Competitiveness: Imperatives for National Development”, said poor administration, sub-optimal collection of taxes, low accountability, corruption and high tax rate, among others, were factors and major challenges hindering tax growth in the country.

At the event, Lagos State Governor Babajide Sanwo-Olu charged his counterparts to look into their expenditure profile and do away with unnecessary spending to preserve more resources to meet the basic needs of the people.

He stressed the need for better utilisation of tax payers’ money by public office holders to build the trust of the citizens. He urged his fellow governors to work toward having a better tax reform process.

According to Sanwo-Olu, who declared that he has not used state resources to purchase any vehicle for himself since he assumed office as governor on May 29, 2019, it is not necessarily fanciful that governors must buy brand new vehicles when there is no need for them.

“We need to look at our expenditure profile as chief executives of our states and ask ourselves: where can I cut the red tape, what can I do away with so as to increase the revenue of my state or even make available more money for my state?

“Till date, I have not purchased any single official vehicle for myself, for any of my personal staff or any of my family members from the government purse. If you see me have a convoy of 10 vehicles, these are all vehicles I was using during my campaigns.

“Governor el-Rufai joined me in one of my cars this morning and I can tell you that the vehicle is one of the ones I used for my campaign; it is not a brand new car.

“I say to my people that it is not a fanciful thing that every governor must begin to buy brand new vehicles when you do not need to. So, all of those millions have gone back into the treasury of the state and we are using it to develop the state very well.”

Governor Sanwo-Olu who stressed the need to increase revenue generation without being totally dependent on money from oil, charged tax practitioners, especially members of CITN, to take leadership position to increase government revenue and change the narrative in the country.

El-Rufai commended Sanwo-Olu on managing the affairs of Lagos and the effort to rebuild the state after the massive destruction that marred the peaceful protests organised by the youth recently.

“Whatever happens in Lagos concerns everybody because it is the economic hub of the country while Kaduna State is the political hub. I can assure you that all the 35 governors will support your rebuilding Lagos project,” el-Rufai promised.

The President of CITN, Dame Gladys Simplice, urged the executive arm of government to ensure that the economic policies in generating revenue are matched with tax reforms that encourage growth through executive orders and sponsorship of legislative bills capable of promoting entrepreneurship development.

She also advised the National Assembly to “address the nature” of the Value Added Tax (VAT) by including more items under the exemption list and giving clarity to the existing ones.

THE GUARDIAN

 

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