The Debt Management Office (DMO) has warned that reports suggesting the suspension of telecoms tax regime will hurt the country’s revenue target for 2023.
Director General of DMO, Mr. Ben Akabueze, raised the red flag during an interview on Arise Television on Tuesday.
His concern came after the Minister of Finance, Budget and National Planning, Zainab Ahmed, stated that the government is projecting a total revenue of N8.46 trillion, out of which N1.9 trillion is expected to come from oil-related sources while the balance is to come from non-oil sources.
Akabueze denied knowledge of the suspension of the telecoms tax, saying he only read it in the media.
He said his office has not been formally notified of the suspension.
The DMO boss noted that the economic team had, while making revenue projections under the Medium Term Expenditure Framework (MTEF) for 2023-2025, taken into consideration revenue from telecoms tax, adding that altering the plan will hurt the economy badly.
‘The MTEF, which was recently approved by the Federal Executive Council (FEC), includes projections for telecoms tax and is presently before the National Assembly.
Over the last two weeks, the Finance Committee of the National Assembly has been holding engagements with agencies of government on this. If we are now advised that this tax is no longer applicable, we will have to rework the MTEF 2023-2025.’’
Akabueze disclosed that the implication of reworking the MTEF was that the projected revenue will reduce while deficit will increase; which means the country will either have to cut down on expenditure or increase debt.
He warned further that the country has a serious revenue problem, which if left unaddressed will snowball into full blown debt crisis.
The debt management expert said if a look is taken at all the indices of debt sustainability, it would be discovered that where Nigeria has major problem is in the area of debt service to revenue which is where the country is testing its limit of sustainability that must be addressed quickly.
He said the telecoms tax is not just what the Ministry of Finance woke up one day to introduce. According to him, it was designed, planned and included in the Finance Bill went through the Federal Executive Council (FEC), National Assembly as an Executive Bill from President Buhari and was also subjected to the test of public hearing and finally signed and passed into law.