Tax rev­enue to GDP drops by 10% af­ter re­bas­ing

Daily Trust - - NEWS - By Olayemi R. Ibrahim

Tax rev­enue to Gross Do­mes­tic Prod­uct (GDP) has plum­meted from 22 to 12 per cent fol­low­ing the re­bas­ing ex­er­cise that saw the Nige­rian econ­omy tak­ing the lead as the largest in Africa.

Speak­ing at the com­mis­sion­ing of the Federal In­land Rev­enue Ser­vices (FIRS) train­ing cen­tre in Du­rumi District of Abuja yes­ter­day, Co­or­di­nat­ing Min­is­ter of the Econ­omy and Min­is­ter of Fi­nance, Dr Ngozi Okonjo-Iweala, said al­though it was heart­warm­ing that the GDP re­bas­ing had re­vealed the true worth of the econ­omy, but the rev­enue to GDP ra­tio had taken a dip af­ter it was re­cal­cu­lated in­clud­ing other vari­ables.

The min­is­ter urged the staff to work hard to move up to 20 per cent be­fore the next re­bas­ing.

Last Sun­day, the min­is­ter along­side the Statis­ti­cian Gen­eral of the Fed­er­a­tion, Dr. Yemi Kale, re­leased new fig­ures show­ing that Nigeria had over­taken South Africa as the largest econ­omy of the Africa con­ti­nent and shot to 26th po­si­tion in global rank­ing.

Fol­low­ing the re­bas­ing ex­er­cise, the coun­try’s real GDP for 2011 and 2012 now stood at 5.09 per cent and 6.66 per cent, while the econ­omy grew by 7.41 per cent in real terms last year.

South Africa’s GDP for 2013 was $370.3 bil­lion (N60.7tn). The new one for Nigeria is $510 bil­lion 24 years af­ter the last one was done.

Okonjo-Iweala charged the FIRS staff to re­dou­ble their ef­fort to re­turn to 20 per­cent of rev­enue to GDP ra­tio.

She said: “The FIRS has been try­ing but like Oliver Twist, I will urge you to do more. It is my hope that this train­ing cen­tre will be used ju­di­ciously to im­prove the ca­pac­ity of your staff to­wards im­prov­ing the coun­try’s non-oil rev­enue base.”

The min­is­ter fur­ther said even though debt to GDP ra­tio had come down from 19 per­cent to 11, the federal govern­ment was not plan­ning to em­bark on bor­row­ing just yet.

Ear­lier, the act­ing Ex­ec­u­tive Chair­man of the FIRS, Kabiru Mashi, said the train­ing school which was ini­tially meant to serve as staff quar­ters was con­verted fol­low­ing federal govern­ment’s mon­eti­sa­tion pol­icy.

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