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2020 Budget: CSOs raise concerns over VAT increase, frivolous items, others

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By Gabriel Ewepu – Abuja

Less than 24 hours President Muhammadu Buhari presented the 2020 budget proposal of N10. 33 trillion to the National Assembly on Tuesday, Civil Society Organisations, CSOs, have raised grave concerns over items of the proposed budget, which include an increase of Value Added Tax, VAT, to 7.5 per cent, frivolous items, deficit and borrowings, and others.

2020 Budget: CSOs raise concerns over VAT increase, frivolous items, others
President Buhari presenting the 2020 Budget proposal to the National Assembly

The Executive Director, Civil Society Legislative Advocacy Centre, CISLAC, Auwal Musa Rafsanjani, said the 2020 budget has issues that should be revisited and reviewed with consideration of the plight of ordinary Nigerians.

Rafsanjani said, “On deficit budget, over time the budget of the country has been on an incremental deficit year in year out, this also means that a considerable amount of the budget will come with attendant borrowing to fund a major chunk of the budget.

“This also comes with the demand to use a huge percentage of the budget to service the loans and borrowings. You can agree that if we use two out of three parts of the budget to service the loans, the budget’s tendency of delivering good development is already compromised.

“Frivolous items in the budget, the reoccurring issue of having some undefined and non-specific line items in the budget every year and also the incidence of repetitive items in the budget year in – year out is an anti-development strategy which gets the same items repeated every year without any proper evaluation of how the previous year was used and the efficiency.

“Proposed VAT increase; the high point of the entire budget is on the proposed VAT increase which will only increase burden on the poor, through unbearable high prices of consumables, there is no effort to curb the finances that are flowing away out the country illicitly, which are majorly from the commercial activities of Multinational companies through their evasive practices.

“It is worth to note that the amount alleged from this activity can increase the budget tremendously and deliver development rather than increasing VAT that will only deter the standard of living in Nigeria. Also, the increased cost of governance – an increase in the number of ministers does not increase any form of efficiency.

“Key priorities for the socio-economic sector; like other years, the financial allocation to the Socio-economic sectors – Health, Education, and Agriculture did not see any considerable increase. While the power sector which has been privatised and supposed to have been yielding income to the Federal Government of Nigeria is gulping about N15 billion higher than the allocation to UBEC, it becomes worrisome on how much of a people-oriented budget it is going to be.”

He, however, called on the National Assembly not to be in a hurry to pass the budget but should take time to do a thorough and detailed work on the proposed budget.

“We ask that there should be strategic planning which is time-bound, with an incremental investment in infrastructure.

“We also ask the National Assembly to due diligence in the scrutiny of this budget and not patronize the executive by being in a hurry to please the executive, they should look out for how this budget will bail out the citizens from the untold hardship. This is the only way the budget will benefit the poor”, he stated.

Meanwhile, the Convener, Concerned Nigerians, CN, Prince Deji Adeyanju said, “The budget will only impact the politicians because they will be spending the proceeds of the nation’s resources to fund their expensive lifestyle while they want to use VAT, increase in income TAX to fund capital expenditures. What does that tell you?

“These leaders don’t care about Nigerian people because you can see from the budget summaries and line items and most of them are clueless people in the sense that the capital expenditure which should naturally drive the economy of the country which is unlike the budgetary items that suggest waste and leakages from government and a country that is not certain where money to fund a capital expenditure budget come from, and how that country be taken seriously?”

The National Coordinator, Grassroots Empowerment and Justice, GEJ Initiative, Comrade Ebriku John Friday, queried, “The first question to ask is, how has the previous budget’s impact on the lives of the ordinary Nigerians. How has it improved their livelihood and stabilised their sustainability?

“Budgets that continue to suffer implementation for all manners of reasons will definitely have a negative impact on the economy with a resultant effect on the lives of ordinary Nigerians

“So whatever high hopes the 2020 budget is being portrayed for now, for me should be taken with a pinch of salt. And as you know it’s just a mere annual ritual of government.

“We are in October, let’s hope that the National Assembly settle down to their constitutional responsibility of scrutinising the budget and get it passed on time so that the president can assent to it within the first month of 2020”, he said.

The Convener, Coalition in Defence of Nigerian Democracy and Constitution, DNDC, Ariyo-Dare Atoye, said there is no still hope for the ordinary Nigerian as far as 2020 budget is concerned.

“The blood and sweat of the common man, through all manner of taxes and enforced exploitation, I am not optimistic it is going to make an impact on the common man. It is more of a yearly ritual without any real target. Although, I see the possibility of increased funding of the Universal Basic Education if the budgetary line item is passed as demanded and there is cash-backing for implementation.

“This increase in UBE funding should lead to some reduction in the number of Out-of-School children with proper focus and implementation. Also, the budget does not suggest that the government and the ruling elites are ready to cut down on waste and the costs of governance.

“Until this is done and reforms are put in place, everything will amount to pouring water insider a basket. So it is good that it is coming a little bit earlier than last year’s presentation.

“But realistically what should give the indication is the allocations. For instance, it is estimated that capital projects will gulp over N2.45 trillion, also debt servicing will take the same chunk of money. Your guess is as good as mine if such whooping amount allocated for debt serving is channeled into projects. So the impact will still be below par”, he said.


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