TheCable

Kemi Adeosun, the minister of finance, says Nigeria’s debt is not too high, but her revenue is just too low.

She explained the reason the IMF was concerned over the debt service ratio to revenue of the country.

The IMF in its latest economic report, put the country’s external debt service to revenue at about 66 per cent.

She said that the country’s debt profile to GDP remained low; however, the cost of servicing loans had gone up due to fall in government revenue.

“The problem is not that our debt is too high, but that our revenue is too low. It is revenue you use to pay debt and our revenue in Nigeria right now is very low,” she said

“Most of our debt matures between two years. That means that the actual amount of interest we are paying is significant. What we are doing right now is refinancing most of that debt, especially those maturing within the next two years.

“We are also working on improving government revenue through tax. Our tax to GDP is six per cent; we are one of the lowest in the world. Ghana is 15 per cent, South Africa, 24 per cent.

“So what we are doing is working very hard to see how we can get more people into the tax net and how to get those who are already in the tax net to pay the right taxes”.

Adeosun said also that the government was devising a means to ensure that all streams of income of an individual were taxed.

For instance, she said a civil servant might also have other businesses such as boutiques or salons and is only paying income tax on salary gotten from working for the government.

She said that government would ensure that everybody paid tax on each of the income streams.

The minister said also that the government was working on harmonising tax collection for federal, states and local government areas.

She said it would be more efficient for one entity to collect, which would simultaneously eliminate issues of double taxation faced by many businesses in the country.

The country’s total debt profile currently stands at N17.5 trillion.