OrderPaperToday – The Senate has passed the 2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) and recommended tax increment for luxury items to address revenue gaps in funding the budget.
MTEF and FSP are documents that provide the framework of designing a budget as enshrined in section 11 (3)of the Fiscal Responsibility act, 2007. Both submissions ought to be considered and approved by the legislature before the budget is transmitted, according to the act.
But President Muhammadu Buhari sent a letter to the National Assembly on the 6th of November, 2018 detailing the provisions of the two documents. The budget was thereafter presented before a joint session of the national assembly two weeks later.
The Chairman Senate committee on Finance, John Enoh, presented the report during plenary on Tuesday.
The following propositions from the executive were maintained: daily production output of crude oil at 2.3 million barrel per day, USD $60.0/6 as crude oil benchmark price, N305/1US$ as the exchange rate and N500 billion as special intervention fund.
But the proposal for the budget deficit largely financed by borrowing proposed at N1.86 trillion was reduced to N1.64 trillion.
On crude oil production, the committee advised that target is achievable due to the “continuous effort of all stakeholders in checkmating the issues of oil facilities vandalism and other vices associated with such regard.”
It was recommended that the Central Bank of Nigeria (CBN) continues to adopt strategies on exchange rate that will aid in the “strengthening of the Naira and bridging the gap between the official and parallel market rate of the foreign exchange.”
The committee also urged relevant agencies to continue exploring way of generating additional revenues to bring down the fiscal deficit.
Other suggestions from the committees asked that “the Federal Government should harness the full optimal potential of the Federal Ministry of Mines and Steel Development in terms of Revenue Generation to minimize the level of borrowing.
“The Federal Government should consider reducing the granting waivers and exemptions while ensuring that the Nigerian Customs Service personnel are at all oil terminals for accountability and the Federal Inland Revenue Service (FIRS) should consider increasing Tax on Luxury goods and services.
“20% operating surplus to be remitted by Government owned Enterprises should be deducted at source.”