A group known as the Nigeria Employers Consultative Association has said the burgeoning cost of subsidy on petroleum products is the reason Nigeria is unable to benefit from the global hike in crude prices caused by the Russian-Ukraine war.
The Director-General of NECA, Mr Wale Oyerinde, made this disclosure in Lagos on Thursday.
Oyerinde also said that Nigeria was missing out in the Organisation of Petroleum Exporting Countries’ crude allocation by 600 barrels per day.
He said that until the country had significant alternative sources of foreign exchange and start exporting more than they imported, revenue challenges might continue to linger.
“We acknowledge the revenue challenge currently faced by the nation. As it is well known, a major quantum of Nigeria’s foreign exchange comes from crude oil sale. Unfortunately, the price of crude oil is not within our control and we are not even meeting our quota of crude allotted to us by OPEC by about 600bpd.
“While the price of crude went up as a result of the Russia-Ukraine war, we were not able to benefit revenue-wise because of the bourgeoning cost of subsidy of petroleum products. Until we have significant alternative sources of forex (non-oil), export more than we import and reduce wastages, revenue challenges might continue for a while.”
Speaking on the World Bank’s advice to the Federal Government to impose property tax on the rich to boost revenue, he said,
“We are not disposed to the imposition of new taxes, especially on businesses, when the government has not maximized the potential of widening the current tax net.”
He further said that focusing on tax increase without addressing the structural challenges might be defeatist.
“Focusing on tax increases without addressing the structural challenges in our tax system might be defeatist. While taxing the rich as being done in some climes is desirable, the process must be structured.”
