Says resurgence of pandemic may threaten budget
Deji Elumoye in Abuja
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed yesterday debunked speculations that the federal government was planing to increase the Value Added Tax (VAT) and other taxes in its proposed Finance Bill.
She also raised the alarm that the resurgence of COVID-19 pandemic in Europe, which has caused the oil price to decline in the international market, may affect the 2021 budget estimate of the federal government.
Ahmed, who spoke while defending the Ministry’s budget before the Senate Committee on Finance in Abuja, dismissed the claims of an imminent increase in VAT and other taxes in the proposed Finance Bill to be presented to the National Assembly soon.
Ahmed said: “There will be no increase in VAT or any form of taxes because we see 2021 as a year of recovery – not only for government but businesses as well.”
The Chairman of the committee, Senator Adeola Olamilekan, had asked the minister about the contingency plans the federal government has put in place to insulate the budget from the shocks of falling oil price.
Responding, Ahmed said: “The actual projection was $40 per barrel and that is the average price that we projected to be for the year. Some of the institutions that are responsible for tracking price of crude oil, actually have crude oil price going as far as $50, $52 per barrel. We took the safer path. It seems the second wave of COVID-19 in Europe is affecting us. We are hoping to have clarity as to which direction to take in the next week or two.”
She, however, dismissed insinuations that the federal government may increase Value Added Tax (VAT) again by 2.5 per cent in 2021.