IMF Guides FIRS, Customs on Boosting FG’s Revenue...

As part of efforts to strengthen the federal government’s revenue, the International Monetary Fund (IMF) has started offering advisory support remotely to some federal government’s revenue generating agencies, THISDAY learnt yesterday.

Among the beneficiaries are the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS).

The Special Adviser on Media and Communications to the Minister of Finance, Budget and National Planning, Mr. Yunusa Abdullahi, confirmed the development while responding to enquiries from THISDAY.

Abdullahi, however, said the IMF officials would not be resident in Nigeria, adding that the development is a standard practice by the multilateral institution.

“There was talk of a residential advisor initially by both the IMF and government, but the IMF team decided to put a temporary hold because of the COVID-19 situation.

“Instead, they are providing advisory support remotely through an appointed team of advisors per agency,” he stated.

According to him, the advisors will provide direction to representatives of the FIRS and the NCS on the various recommendations made by the IMF team and also provide engagement, support and insights on the implementation plans in their report.

“This is a standard practice by the IMF,” he said.

The IMF in its latest Article IV Consultation on Nigeria, which was released earlier this month, had stressed the need for the federal government to intensify revenue mobilisation in order to reduce fiscal sustainability risks.

The Washington-based institution had advised the government to rely initially on progressive and efficiency-enhancing measures with higher tax rates, while awaiting a more sustained economic recovery.

It had also highlighted the need for improved social safety nets to cushion potential negative impacts on the poor.

The IMF had stressed “the need for urgent policy adjustment and more fundamental reforms to sustain macroeconomic stability and lift growth and employment.

“Directors welcomed notable reforms undertaken in the fiscal sector, including removal of the fuel subsidy and steps to implement cost-reflective tariff increases in the power sector.”

Also, the IMF advised the federal government to increase Value Added Tax (VAT) to 10 per cent by 2022, from the 7.5 per cent it is presently, once economic recovery takes root.

It also recommended that VAT in the country should be 15 per cent by 2025.

It stated that Nigeria has one of the lowest revenue levels as a share of GDP worldwide, while a large share of the country’s revenue is spent on public debt service payments, leaving insufficient fiscal space for critical social and infrastructure spending and to cushion an economic downturn.