The Senate on Wednesday began its deliberation on the proposed 10.33 Trillion Aggregate Expenditure 2020 Appropriation Bill submitted by President Buhari on Tuesday.
Senator Gabriel Suswam; on his path expressed his worry at the increase in the Value Added Tax (VAT) from 5% to 7.5%, he argued that aggregate economic activities in the country constituted majorly of small businesses and they contributed less to the GDP of the nation’s economy, while pointing out that the 5% increase was on the high side.
He said; “Looking at the technical side of the budget on the issue of revenues that were supposed to be accrued and the sources, the bill submitted by Mr. President is a financial bill, and that bill has five thematic areas and I am worried on the area of revenues.
VAT that has been moved from 5% to 7.5% and this one of the aspect that we intend to raise revenue to finance critical areas of the health sector.
“However, Most of the aggregate economic activities within the country are small business enterprises;most of these businesses would be unable to address this issue of 7.5% VAT increase.
To the extent that we might not necessarily achieve the 2.93% GDP growth that is projected by President Buhari in this budget. Also, it worries me,because 5 % for me is on the high side and that it has exempted, mostly food items.
There are other small scale enterprises that attract more economic activities, but how many of these people really contribute to the GDP of the nation. So if we are targeting to raise money from VAT, let me say that it is like a double edge sword.
He futher cautioned that the VAT increase would force lot of businesses to shut down, he said; “If we don’t take time it will drive out a lot of business present, economy would contract, so we will not be able to achieve the projection as put here by Mr. President.
He continued “The deficit also worries me, because if we look at deficit of 2019 which was 1.9 trillion and the deficit of this year is 2.4 trillion this shows that there is a corresponding borrowing increase.
If we continue they are then the percentage to GDP is just 1.5%, we just have a threshold of 3% if we go ahead because it is gradually moving up from 2007 if we look at the deficit it has been on the rise. As deficit rises borrowing comes and the money for services of debt keep increasing.
Former Deputy Senate President Senator Ike Ekweremadu applauded President Buhari on the increase of the budget allocation to the road and human rights commission sector.
He said; “I am pleased on road sector development and the marginal increase in the allocation to the human right commission, these are indeed commendable steps.
The President has done his job by presentation of the appropriation bill in pursuant to section 81 of the constitution now, the job is left for us to now consider this bill and make appropriate adjustments but we must be conscious of the fact that whatever is the final outcome must be our own product.
We cannot blame Mr. President or anybody if we the senate fail in this responsibility of adjusting the proposal where necessary.
“After the passage of the budget we must also be involved in its implementation; it is also our responsibility under our powers of oversight to ensure the judicious application of our revenues.
To ensure full implementation of this budget we must also emphasis on revenue generation but certainly not at the expense of the ordinary Nigerian people.
We can increase revenue through other strategic areas, instead of punishing the ordinary people of Nigeria. We need to show more emphasis on the mineral sector development, we have not seen emphasis on this in the budget, we need it to take advantage of the solid minerals in our country.
Commenting on the FG’s oil revenue projection of N2.64 trillion, Senator Ewhrudjakpo Lawrence representing Bayelsa West disagreed with the projection of the rise of crude oil prices.
He said; “The expectation that crude oil will continue to rise for us to earn more revenue for me is not right. We must cut down to the barest minimum so that, you don’t expect that there will continuous crisis in the middle east for our prices to be realistic.
I would suggest that we look at these assumptions and take what is realistic and that also brings me to the issue of the foreign reserve.
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