Vice-President Yemi Osinbajo has disclosed that the Federal Government plans to tax 700,000 more companies as part of efforts to increase non-oil revenue and address the economic challenges facing Nigeria.
Osinbajo made this known on Thursday at the 2016 Presidential Policy Dialogue Session, organised by the Lagos Chamber of Commerce and Industry.
“A great effort has been made to improve non-oil revenues. This includes bringing an additional 700,000 companies into the tax net as compared to the targeted 500,000 set at the beginning of the year,” he said.
Osinbajo said that the Foreign Portfolio Investment, FPI, coming into the Nigerian economy via the capital market has declined by 85.5 percent since the first quarter of 2015; from $621 million in Q1 of 2015 to $90.3 million by Q1 2016.
Foreign direct investment also took a plunge of 56 percent of from $395 million in Q1 2015 to $175million by Q1 of 2016.
“Inflation is at 16.5%. Depreciation of the naira, increase in importation costs due to scarcity of FX. GDP declined from 6.3% in 2014 to 2.15% in 2015 and -0.36% in Q1 2016.
“Earnings from oil declined in the past eight months due to vandalization of pipelines and export assets in the Niger Delta. Power output fell from 5kMW in February to about 2.5k recently on account of over 60% loss in gas production due to pipeline vandalization,”the VP said.
According to Osinbajo, Other steps taken by government to tackle the economic recession include assisting states and local governments to pay workers and improving capital expenditure.
“We have had three such interventions including the latest loan of N90bn as part of a fiscal responsibility plan for States. These interventions have helped to boost household spending, which were key steps to prevent the economy from falling into deep recession,” he said.
The vice president noted that the government pledged to keep capital spending in the budget at a minimum of 30 per cent, adding that “Accordingly, we have already made capital releases of N332bbn, with another N100bn set to be released in the next few days,”.
He said other policy instruments used to help the economy include the Treasury Single Account, “which has brought transparency into inflows & outflows of government monies.”
He also said the country’s milled rice capacity was being increased from three million to 10 million tons annually.
Osinbajo said government was aware of the slump in Nigeria’s Gross Domestic Product, Foreign Portfolio Investment into the country, and decline in power generation as well as power output, but promised that the challenges is being addressed.
He said: “Our immediate tasks to achieve our economic objectives are: 1. reduce fiscal and forex imbalances; 2. boost dollar liquidity; curb inflation; 4. lower interest rate and ensure lending to the real sector 5. increase FDIs and FPI by sustaining enabling policies.”