Funds in the Excess Crude Account, ECA, were spent on Super Tucano Jets and other military equipment, the Minister of Finance, Mrs. Zainab Ahmed, has explained.
There have been concerns about the depletion of the ECA, following the disclosure, last week, that it was depleted from over $2 billion to about $631.5 million within one month.
Addressing newsmen in Abuja yesterday, the minister disclosed that the withdrawal of the $1 approved for the military to fight insurgency, in addition to the Paris Club Refund to state governments, were responsible for the sudden reduction in the account.
She said: “The ECA as at January 2018, had a balance of about $2.45 billion. There were a number of inflows into that account during the course of the year, bringing the total balance to about $ 3.5 billion as at October, 2018
“We had approval from the NEC to use $1 billion for the needs of the security services and so far, I am sure you all know we have paid for the Super Tucano jets and following that, we have also paid for some critical military equipment which means that most of the $1 has been utilized to date.
“We have also got instructions from Mr. President , with the support of NEC, to pay part of the debt that is being owed by the federal government to the states in respect of the Paris Club. That have also been paid from that account. So to date we have a balance of $631.445 million.”
New taxes targeting luxury goods
On the plan taxes, the minister said there would only be an introduction of taxes on luxury goods and that rates of existing taxes would not be increased, adding that if anything, there could be a reduction in rates of taxes affecting small businesses.
She said: “We are not increasing tax rates. We are increasing tax collection by expanding tax base but this is a decision that will involve the economic management team, FEC and NASS. If anything, we are likely to reduce taxes for the lower groups of businesses, that is the SMEs.
“But we are doing everything we can to make sure that high net-worth individuals are found out and that they pay the right level of taxes that they are supposed to pay.
“We are also going to implement special luxury taxes that have since been approved but not implemented. Those taxes will be on special selected items and they are few items that are of very high value and they will be much higher than the current value of the current taxes that are being paid.”
Mrs. Ahmed described the nation’s fiscal outlook as challenging and as such decided to prioritise revenue generation, going forward.
She said: “The fiscal environment has been much more challenging, especially with regards to revenue generation. While this year’s revenue performance presents an improvement from last year, with a recorded increase of 40% as at the end of the third Quarter of 2018, this performance is unsatisfactory to our administration when compared with the targets we set out to achieve with an overall revenue of 53% in the same period.
“In view of this, I am prioritizing revenue generation and as a result, steering my team to implement some revenue growth strategies that aims to boost revenue performance by deploying the following initiatives, among others.”
The minister disclosed that the Whistleblower Unit recovered over N8.5 billion and $465 million, among others, from the 1,051 investigations conducted from tip offs received.
Similarly, she said that over N35 billion was recovered through the Voluntary Assets & Income Declaration Scheme, VAIDS, with a significant recorded increase to the tax base.
There ‘ll be consequences for MDAs that fund election
Responding to journalists’ concerns that public funds could be channeled to election financing through the federal Ministries, Departments and Agencies, MDAs, the minister said President Muhammadu Buhari’s administration would not tolerate it and that there would be consequences for any such diversion.
“Let me remind you that this is the administration of President Muhammadu Buhari. The President has directed that every MDA should stay focused on its works.
“The Economic Management Team has been directed to stay focused on managing the economy and to monitor all the works that are going on in MDAs.
“There will be consequences for any agency that gives out money for the purposes of funding elections,” she warned.
The minister also disclosed that $5.4 billion Paris Club refund has so far been disbursed to states by the Federal Government.
According to her, the Federal Government has taken steps on debts repayment, as a total of $5.4 billion has been paid for the Paris club refund, $1.9 billion as export expansion grant and $6.8billion payment for cash call obligation.
The $5.4billion paid as settlement of the Paris Club refund, when converted based on the N305 per dollar official exchange rate of the Central Bank of Nigeria is about N1.65trillion.
The Paris Club Refund was released to states in phases based on some conditions.
