Dr Samuel Nzekwu, former president, Association of National Accountants of Nigeria (ANAN), on Sunday urged the Federal Government to diversify the economy to meet the challenges of prevailing slump in oil prices.
Nzekwe told the News Agency of Nigeria (NAN) in Lagos that must improve the performance of the non-oil sector, particularly the agricultural sector, in order to mitigate the effect of the slump on the economy.
“Everybody was talking about diversifying the economy. Oil could finish and we were being warned everyday that one day oil would finish.
“Most countries use oil windfall to develop infrastructure and create enabling environment for their economies to thrive.
“It is unfortunate that we waited so long until now when the price of oil in the international market came down and we started planning,’’ Nzekwe said..
He said that since the nation’s economy was oil-based, anything that happened to oil would affect the country.
The former ANAN president recommended that the budget benchmark for 2015 be cut down to 70 dollars as against the 73 dollars proposed by the government.
“If the benchmark is adjusted to 70 dollars, whenever the need arises, there could be supplementary budget. There is no need to put the benchmark at the point you are not sure of”, he said.
He also called for strict implementation of annual budgets in order to move the nation forward.
“All along, because of poor budget implementation, capital projects have become more like recurrent expenditures because of poor performance, poor materials and embezzlement.”
According to him, a situation where same capital projects are rolled over year-in-year out is not healthy for the economy.
He also said that the federal government must tackle corruption and insecurity, invest in critical infrastrusture as well as end epileptic power supply to save the economy.
Nzekwe, however, lauded the idea by government to tax luxury goods to generate more revenue.
“Is a known fact that Nigerians do not pay tax. The Federal Inland Revenue Service (FIRS) should do more enlightenment about the Value Added Tax (VAT) because the VAT only affects the end users.
“FIRS should set up effective and efficient machinery to improve tax collection, not by coercion or arbitrariness, but in a developed manner to improve Internally Generated Revenue.
“The FIRS has not done well in the collection of VAT as a result of not being able to register all vatable persons and organisations in the country.
“A lot of organisations are outside VAT net and the FIRS is only waiting for them to fall into the net before getting hold of them,’’ the former ANAN president said.
He noted that the introduction of the Tax Identification Number (TIN) has helped to improve tax collection, but said the system was not good enough as organisations are still evading tax payment.
“Money from VAT alone is capable of financing the budget to a very large extent.
“The taxation issue has come to a point that companies and individuals operating in the country must be made to meet minimum regulatory requirements to do business if they are demanding for foreign exchange.”
Nzekwe said henceforth such organisations should also be made to produce evidence of registration with the Industrial Training Fund and their contribution to the national pension scheme.
“If these conditions are put in place, they would reduce the rush and pressure mounted on the naira by those companies seeking for foreign exchange,” he told NAN. (NAN)
Leave A Commentposted in Business by anu