The Worldwide Financial Fund (IMF) has requested the Nigerian authorities to place in place a extra environment friendly tax assortment system with a purpose to broaden its income base.
The Fund’s place was expressed by Mr. Davide Furceri, Division Chief, Fiscal Affairs Division of the IMF whereas responding to a query on how Nigeria might finest tackle her excessive debt service /income ratio, at yesterday’s Fiscal Monitor press briefing on the on-going IMF/World Financial institution Annual Conferences in Washington DC.
He mentioned that Nigeria’s debt service/income ratio was too excessive, leaving little assets for investments in programmes and initiatives that would develop the nation’s socio-economic growth as quick as desired.
Although he mentioned that Nigeria’s Debt Service to GDP has lowered from a close to one hundred pc within the latest previous to 60 %, the IMF chief mentioned that the nation’s coverage makers wanted to focus extra on era of income with a purpose to additional scale back the proportion of its income that goes to debt servicing.
He acknowledged: “There’s must develop the income/GDP ratio. For a rustic Like Nigeria, the Debt Service /Income is about 60 %. What which means is {that a} bigger a part of the income of the nation goes into debt servicing. What we advocate for international locations like Nigeria- if they will enhance their income mobilization, they’ll be capable of scale back the portion of the income that goes into debt servicing.
“It is very important broaden the tax base with a purpose to have extra income and particularly in Nigeria to place in place a system and mechanism that’s clear and environment friendly to help the federal government in gathering extra income.”
The federal authorities has put the present debt service/income ratio at 68 %, down from 97 % it inherited.