Nigeria cannot take advantage of the increase in oil prices brought on by the Russian-Ukrainian conflict due to the rising cost of petroleum product subsidies, Mr Wale Oyerinde, Director-General of NECA said.
Additionally, he said that Nigeria was losing out on 600 daily barrels of petroleum from the Organisation of Petroleum Exporting Countries.
According to Oyerinde, income issues can persist until the nation has considerable alternative sources of foreign cash and begins exporting more than it imports.
“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 sales. 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.”
In response to the World Bank’s recommendation that the Federal Government tax wealthy property owners increase revenue, he replied,
“We are not disposed to the imposition of new taxes, especially on businesses, when the government has not maximised the potential of widening the current tax net.”
He further said that focusing on tax increases 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.”