AS THE FG MOVES TO BORROW N11.03 TRILLION, FINANCE MINISTER MINISTER ISSUES A WARNING AGAINST COMPARING NIGERIA TO SOUTH AFRICA

Nigerians have been cautioned by Minister of Finance and National Planning Zainab Ahmed not to compare their country to South Africa.

She claimed that South Africa's economy is tax-based. Nigeria and Sudan are rivals in the domain of taxation, in contrast.

When defending the government's Medium Term Expenditure Framework and Fiscal Strategy Paper on Monday, the minister revealed this.

The majority of top earners in Nigeria, especially at the state level, don't pay taxes, according to the minister.

"It is impossible to compare South Africa and Nigeria. The national budgets of the United States and South Africa are not proportionate. It is crucial to note that, in contrast to Nigeria's economy, taxes make up a substantial portion of South Africa's budget. In Nigeria, the tax base is still quite small. The VAT rate is still fairly low at 7.5%; on average, West Africa has a 15% VAT rate.

"Only Sudan has a lower tax rate than us in the entire globe. Even Sudan has raised its VAT percentage. We must all effectively increase tax revenue. PIT is incredibly low in Nigeria. Only a small percentage of high-net-worth individuals pay taxes, "he said.

The federal government intends to borrow N9.32 trillion, of which N7.4 trillion will come from the domestic market and N1.8 trillion from international sources, according to the document it has provided to the lawmakers. The earnings from privatization and the N1.7 trillion in multilateral project-related loans are projected to bring in N206.1 billion for the government.

She further stated that the government could not continue to provide subsidies after June 2023. Due to the government's lack of plans for subsidies past mid-2023.

This remark is being made as the federal government prepares to borrow more than N11 trillion to cover the gap in its budgeted spending.