Wednesday, June 01, 2016 11:32AM /PwC
Highlights of Revenue and Expenditure
· **Total capital expenditure is circa NGN 1.8 trillion which includes NGN156 billion under Statutory Transfers and NGN 86 billion in Debt Service.
· Oil revenue is expected to decline by 50% while non-oil revenue is projected to increase by 26.5%.
· Increase in non-oil tax revenue will come mainly from Company Income Tax and Value Added Tax expected to increase by 33.2% and 14.9% respectively.
· Spending is planned to increase in 2016 (compared to 2015) by about 35% to an aggregate expenditure of N6.06 trillion.
· Non-debt recurrent expenditure for 2016 which represents about 43.7% of the aggregate expenditure is expected to rise by 2% to NGN2.646 trillion. This includes NGN300 billion special intervention fund.
· Capital expenditure is proposed to increase by about 180% to NGN1.58 trillion which constitutes about 30% of total expenditure.
· The ministry of works, power and housing was allocated NGN423 billion or 26.6% of the capital expenditure being the top recipient of capital spending.
· The federal government has earmarked NGN2 billion for the National Job Creation/Graduate Internship scheme.
· The debt service cost is expected to increase by 54.7% (to a record NGN1.475 trillion) accounting for about 24.3% of total expenditure or 38% of revenue notwithstanding a low debt to GDP ratio of circa 13%.
· NGN1.3 trillion and NGN54.5 billion are required to service foreign and domestic debt respectively.
· A sinking fund of 113.4 billion is for the purpose of retiring matured loans.
MTEF is Medium Term Expenditure Framework
· Actual inflation year on year as at April 2016 was 13.7%
· Real GDP growth rate for Q1 2016 was -0.36%
Tax Proposals in 2016 Budget Speech
· There was no proposal to change tax rates or impose new taxes in 2016.
· The budget speech was silent on the proposals to introduce a National Security Tax and the proposed increase in Tertiary Education Tax.
· Government is however focused on measures to increase the tax base and overall compliance rate in the country.
· Luxury tax is expected to generate NGN15billion but no disclosure of measures to implement.
· It was mentioned that the tax rate for smaller businesses will be reduced.
2016 Revenue Generation Split (MTEF)