All Private Jets Owners Most now Pay More Taxes As Oil Prices Crash

           The Nation reports that private jet owners are to pay more taxes as the Federal Government initiates measures to cushion the effects of oil prices crash.

Minister of Finance Dr. Ngozi Okonjo-Iweala announced the measures in Abuja, saying it is important for Nigeria to keep an eye on oil prices because the importance of oil to the country’s economy. The rich will be hard hit by new measures to save the economy, which has been badly shaken by falling oil prices.

There would be surcharges on luxury items, such as champagne, private jets and yachts, so that those well-to-do individuals can contribute more to the government’s treasury.
Other measures announced yesterday by Dr. Okonjo-Iweala are freezing of foreign travel for civil servants, slash of budget oil benchmark and drop in capital projects financing. International travel within the public service will be severely curtailed. From next year, only critical foreign travels will be allowed with the permission of Head of Service of the Federation (HoS). “Any other foreign travel would have to be funded by those inviting civil or public servants and all expenses paid by the inviting body. Same goes for training, local training will be encouraged but expenses for foreign training will be borne by inviting foreign host with permission sought from HoS. Evidence of sponsorship detailing all expenses paid for by inviting body must be tendered before the HoS will grant approval.” She said.

According to the Minister, the Medium Term Expenditure Framework (MTEF) and the 2015 budget proposal before the National Assembly have been revised. The Federal Government is now proposing a benchmark of $73 dollars per barrel compared to the proposed $78. The Excess Crude Account has $4.11 billion down from $11.5 billion at the start of 2013. Government’s projected revenue for 2015 is $6.83 trillion lower than the $7.288 billion initially targetted for the outgoing year. A projected expenditure for 2015 is N4.66 trillion down 2.92 per cent from 2014’s.

Dr. Okonjo-Iweala said: “Given the nature of the oil market, we needed to see the extent and trend of the oil price in order to take the right measures. Panic is not a strategy. It’s important that our strategies are based on facts and a clear understanding of both the strengths of the economy and the challenges posed by the drop in oil price, which is currently at $79 for our premium Bonny Light Crude.The drop in oil prices is a serious challenge which we must confront as a country. We must be prepared to make sacrifices where necessary. But we should also not forget that we retain some important advantages such as a broad economic base driven by the private sector and anchored on sound policies. Our strategy is to continue to strengthen the sectors that drive growth, such as agriculture and housing while reducing waste with a renewed focus on prudence.”

However, critical infrastructure projects will not be affected, but there will be a drop in some capital spending, according to the Minister. Investment in infrastructure, job creation and security will not change, but there will be prioritised investment in those with significant economic impact, such as Lagos-Ibadan Expressway, Second Niger Bridge and rail projects. she said.

Also unaffected are public sector wages and key initiatives in education, health and other areas critical to the country’s human development. The government’s efforts from now, she said, will be to increase Internally Generated Revenue (IGR) of entities and ensure that they remit these IGRs on time to government coffers. “This economy has to stop talking about oil” she said.

Mrs. Okonjo-Iweala explained that the best way to protect the interest of the ordinary people is to control inflation as much as possible, expand the economic base, strengthen the sectors that drive growth, boost critical infrastructure and create more jobs.

The External Reserve, she said, “is now at $37 billion and is still reasonably good”. She said the government would spend part of the Excess Crude Account (ECA) on some transparent transactions. “We might tap into half of the ECA between now and the new year. We have arrears on subsidy pending when this will be addressed,” Mrs. Okonjo-Iweala concluded.