- Fuel subsidy to gulp N3.36trn in first six months of 2023
BY EDMOND ODOK – The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed says the Federal Government expended about N12.87 trillion of the total N17.126 trillion budgeted for 2022 as of November 30, 2022.
Of the N12.87 trillion, about N5.24 trillion went into debt servicing while N3.94 trillion was deployed for personnel costs and other overhead expenditures.
Mrs Ahmed also hinted that the Federal Government will be coughing out about N3.36 trillion as payment for fuel subsidies in the first six months of 2023
The Minister, who disclosed these figures on Wednesday at the Public Presentation and Breakdown of the Approved Federal Government 2023 Appropriation Act recently signed into law by the president, Muhammadu Buhari, said; “The actual spending as of November 30 was N12.87 trillion.”
According to her; “Of this amount, N5.24 trillion was for debt service; N3.94 trillion for Personnel Costs, including pensions; Statutory Transfers, Overhead and Service Wide Votes expenditures totalled N1.81 trillion; and N1.88 billion was released for capital expenditure.”
Also, Mrs Ahmed explained that the fiscal deficit for 2022, estimated at N8.17 trillion, was inclusive of the supplementary Budget, even as she said the deficit figure stood at N6.37 trillion as of November 30, 2022, adding that; “The deficit was totally financed by borrowings, mostly from domestic sources.”
Addressing issues around the current status of the Finance Bill, 2022, the Minister said the document is “undergoing review to finetune certain areas ahead of reverting to the enactment of this Statute into law”
She said specific areas of Tax Equity Reforms aim at bringing Capital Gains from acquiring and disposing of interests in Cryptocurrencies, Digital Art & other Digital Assets into the Tax Net; Ensuring under-taxed/not taxed sectors, taxpayers, etc. are brought into the tax net in line with extant laws and regulations; and Clarify that 35% of Electronic Money Transfer Levy receipts should be paid to Local Govts.
On revenue generation and tax administration, as reflected in the Finance Bill, Mrs Ahmed said proposed amendments focus on; Combatting tax evasion and aggressive tax planning practices vis à vis VAT reforms; Aligning petroleum taxation with the Petroleum Industry Act, 2021; and Complementing Ease of Doing Business and other reforms by enhancing Tax Administration.
However, amid concerns raised by the World Bank and economic experts on different forums over Nigeria’s continuous petrol subsidy payment, the Minister hinted that payment of fuel subsidies will gulp about N3.36 trillion in the first six months of 2023.
Mrs Ahmed, while acknowledging that subsidy payment would drag on till the end of June 2023, said; “The projected fiscal result in the 2023 Budget is based on the PMS subsidy reform scenario.”
“In the 2023 Budget framework, it is assumed that fuel (petrol) subsidy will remain up to mid-2023 based on the 18 months extension announced in early 2022”, she added
