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Despite increasing hardship, Nigeria’s finance minister suggests increased taxes to reduce the country’s ballooning debt

Despite biting hardship occasioned by rising inflation and shrinking earnings, Zainab Ahmed, the Minister of Finance, Budget, and National Planning, has suggested that an increase in taxation was the best way to reduce the nation’s obscene debt.

At a workshop on tax expenditure held by the ECOWAS Commission under the Context of the Implementation of the Support Programme for Tax Transition in West Africa (PATF) in Abuja on Tuesday, the minister, who was represented by the Director, Technical Services in the ministry, Fatima Hayatu, stated that the issue of tax expenditure was a matter of great concern to the government.

“If we have more taxes and redirect the taxes to the right fiscal sectors of our economy, we will reduce our debt burden,” Ms Ahmed posited. “It is not as if the debt is beyond what the government can handle. If you look at the ratio of the debt to the Gross Domestic Product (GDP), I think the government is doing well.”

“The debt is not something that cannot surmounted. The programme is to block leakages where the taxes are being diverted. So, if we block leakages, and if it is transparent, Nigeria will borrow less and we will have more money to finance other sectors,” she added.

She further highlighted the need to block revenue leakage as another measure that needed to be taken to reduce the nation’s high debt burden.

The minister noted that tax expenditure management reforms were taking off in Nigeria and that these developments had led to ongoing internal agency restructuring for improved efficiency as well as the continuous development of in-house capabilities.

Her suggestion comes in the wake of heavy hardship encountered by Nigerians in different parts of the country as a result of flooding and the incessant rise in the country’s inflation.

Peoples Gazette previously reported that 603 people died and 1.3 million were displaced as a result of flooding that had rocked the country in recent weeks.

On Tuesday the Nigeria Bureau of Statistics NBS reported that the country’s headline inflation rose to 20.77 per cent in September from the 20.52 per cent recorded in August.

This is not the first time Ms Ahmed is suggesting taxes as a solution to the country’s economic woes. The minister proposed a five per cent tax on all telecommunications services, including calls, SMS, and data services, in July. However, Isa Pantanmi, Minister of Communications and Digital Economy, opposed the move, claiming that the proposed tax was ill-timed.

In nearly eight years under Mr Buhari, Nigeria’s debt profile has risen up to N42 trillion, according to the Debt Management Office. 

With a fresh proposal to borrow over N11 trillion to fund the 2023 budget deficit, the Buhari regime will bequeath over N50 trillion debt on Nigeria when he leaves office next May.

Source: Peoples Gazette.

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