*Nigeria can generate $80 bn by 20% tax compliance
*Oil not drying up for Nigeria – Former Petroleum Minister
Contrary to clamour by government officials and Nigerians to revoke the licences of the privatized power sector embarked upon in 2013, former Director General, Budget Office of the Federation, Mr. Olabode Agusto, has said there was need for a complete privatization instead of reversal.
This came as he called for more investment in infrastructure to include electricity, railway and road to grow the country’s economy.
Agusto, who is the Director, Agusto & Co.Ltd, made this call at the 17th Annual Aret Adams Memorial Lecture held in Lagos.
According to him, “The federal government should not reverse the privatization going on in the power sector. They should not reverse it no matter how tempted they are.
“I strongly believe that the government should go ahead and complete the privatization scheme because that’s where the problem is. Also, they should focus on three key areas to include gas, tariff and the national grid.
“With respect to that, the federal government should stop regulating the price of gas. You should understand the sole aim is for people to access electricity. “However, certain gas prices are not on economic levels, the owners of the gas are not fully in gas infrastructure and the gas fire plants that we have were built as far back as when I was a director of budget.
“The government should work with the industry operators to look at the tariff and they have two principal objectives in mind, in setting the tariff. Objective one is that an efficient player in the industry must be able to cover its cost of capital and you must subsidize poor households.
“I always argued that you can define a poor household. A household that has one or two rooms, a few light bulbs, one electric fan, and an electric iron can be computed and should be subsidized.”
Finance model to grow economy
He called for three models in developing the country’s economy, namely “One, we must grow our output significantly, manage our population and the last which is income distribution, which taxation would be used to address.
He, however, frowned at the current tax complaint system in the country, saying at 20 percent compliance from non oil and oil taxes, the country can generate about $80 billion annual revenue.
He said, “If the country was to increase its non oil tax revenue to 15 percent, it would grow additional $40 billion dollar revenue annually. By our estimate, if we are able to sustain that and add five or six percent of oil taxes, equals 20 percent, thereby increasing the government revenue to about $80 billion annually.”
Agusto, said the government need to reform its tax laws and focus on three principal taxes, “namely Personal income tax, value added tax and companies income tax, if it wish to grow its economy.”
Also speaking, Former minister of Petroleum, Mineral resources, Chief Obot Etiebet, argued that Nigeria was yet to discover its full oil potential as oil would not go out anytime soon.
“Nigeria has not tapped its full oil discoveries yet. We are going to discover more oil and the speculations of oil getting dried up soon are not for Nigeria.
“However, as a country we need to diversify our revenues and develop other sectors of the country to generate more revenue that will sustain and grow our economy” he added.