But it will take more than luxury tax to plug the hole. We need to simplify the tax system and broaden our tax base.
Brent crude price has now declined by over 40% hovering around USD 65 per barrel from its peak of over USD 110 per barrel in June 2014. Analysts continue to slash both their demand forecast and crude price for 2015 indicating that we may be in for a long period of decline.
Nigeria’s 2014 Budget was predicated on an average crude oil price of USD 77.5 with a daily production of 2.39 million barrels per day. Even though the average price for the year to date is still above the benchmark price, the pain point for Nigeria seems to be much higher than the benchmark price coupled with the impact of less than budgeted daily production. No thanks to oil theft, vandalisation and delay in enacting the Petroleum Industry Bill into law.
Read my article in today Guardian Newspaper pg 58 for further insights.