The federal government seeks to secure around 2.26 trillion naira from the federation’s value-added tax account in 2022.
He also expects another 10.5 trillion naira from the main federation account.
These are contained in the Medium-Term Expenditure Framework (MTEF) 2022-2024 and the Budget Strategy Paper (PSF).
This despite the clamor of some state governments to collect VAT in their states.
Some southern states disagree with the federal government in their attempt to become the sole VAT collectors in their fields.
Rivers and Lagos states have since signed bills allowing state governments to collect VAT, a move opposed by the Federal tax service (FIRS) while others are in the process of doing so.
The governors of the southern states, under the auspices of the Southern Governors Forum (SGF), at their recent meeting in Enugu, expressed their support for the collection of VAT by state governments.
The governors asserted that the collection of VAT was within the powers of state governments.
There are, however, steps by the FIRS to legally empower the federal government to collect VAT nationwide through a constitutional amendment.
The approval of the 2022-2024 CDMT followed the examination of the report of the Joint Committee on Finance of the Senate.
The MTEF shows that of the 2.26 billion naira the federal government is expected to receive in 2022, the states are expected to receive 1.13 billion naira, local governments 791.73 billion naira and the federal government, 339.3 billion naira. of nairas.
“Based on the key parameters governing the fiscal framework, the net amounts payable to the main pool and VAT pool federation account are projected to respectively 10.52 trillion naira and 2.26 billion naira in 2022. The share of oil revenue is about 51.1% of total revenue of the Federation account.
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“The other components of the income of the Federation account include corporate income tax revenue of 1.87 trillion naira, customs revenue of 1.7 trillion naira, special levies of 148.40 billion naira, solid minerals of 6.01 billion naira and the electronic money transfer levy of 209.77 billion naira. The federal government’s share in the main pool of the federation account is 5.51 trillion naira, while states and local governments are expected to obtain 2.8 trillion naira and 2.16 billion naira, respectively in 2022. From the VAT pool, the eastern federal government is expected to receive 339.31 billion naira, the states 1.13 billion naira and local governments 791.73 billion naira ”, said the chairman of the committee, Adeola Olamilekan, in his statement. presentation.
VAT, he said, was estimated using projected aggregate nominal consumption, taking into account “valuable” items and collection efficiency.
He explained that aggregate consumption is estimated at 149.35 trillion naira in 2022 compared to the revised 136.57 trillion naira estimated for 2021 (NBS’s original estimate was 118.89 trillion naira).
“Like the CIT, more taxpayers should be included in the tax net with the effective implementation of the provisions of the 2020 finance law and the improvement of the efficiency of collection. Medium-term VAT projections are based on maintaining the rate at 7.5 per cent. In the medium term, efforts to further improve the coverage and efficiency of VAT collection will be accelerated.
“The overall revenue available to finance the 2022 budget is projected at 7.26 trillion naira (nine percent more than the 2021 budget). Of this amount, 3.16 trillion naira (49.1%) is expected to come from petroleum-related sources, while the remainder will come from non-petroleum sources, ”he said.
The lawmaker said that in the medium term, the GDP growth rate is expected to reach 4.2% in 2022 before slowing to 2.3% in 2023 and recovering to 3.3% in 2024.
The engines of growth, he said, are expected to remain telecommunications, agriculture, cement and broadcasting, and overall pre-election spending towards the 2023 general election could also contribute to growth. Therefore, overall growth is expected to be further moderate in 2021.
PREMIUM TIME reported how the Senate approved the MTEF setting the benchmark price of crude oil at $ 57 per barrel and an estimated total expenditure of 13.98 trillion naira, which includes expenditure of 1.44 trillion naira for state-owned enterprises and Donor funded projects amounting to N62.24 billion.
Lawmakers also approved N15.46 trillion and N16.77 trillion to be spent by the federal government in 2023 and 2024 respectively.
The exchange rate of N / $ 410 proposed by the executive was also approved.
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