FG Records N3.1bn Revenue Shortfall in 2015

FIRS
  • FG Records N3.1bn Revenue Shortfall in 2015

The Fiscal Responsibility Commission says the Federal Government recorded a revenue shortfall of N3.1bn at 33.34 per cent of its gross federally-collected revenue in 2015.

This was contained in the 2015 Annual Report and Audited Accounts of the commission released on Tuesday in Abuja.

It said that N9bn was anticipated as federally-collected revenue in 2015, but only N6.1bn was actually collected.

He said, “In relation to the previous year, the 2015 budget was 90.04 per cent of the N10bn budgeted for 2014.

“The 2015 actual revenue performance of N6.1bn was below the performance of N9.3bn or 93.0 per cent, achieved in 2014.”

It, however, said that the oil slump and shortfall in oil production, due to oil theft and pipelines vandalism, accounted for the sharp revenue decline.

Giving a detailed analysis, the report said that for oil revenue, the performance averaged 69.11 per cent in 2015 against 93.98 per cent in 2014, a shortfall of 44.26 per cent.

The total oil revenue (gross) received for 2015 was N3.75bn, while that of 2014 was N6.73bn.

The non-oil revenue received for 2015 was also much lower than what was received in 2014.

Detailed analysis of non-oil revenue (gross) revealed that all its components performed below the budget and equally lower than 2014 receipts.

It said that the Value Added Tax receipts was N778.7bn in 2015 against N794bn in 2014, while Company Income Tax receipts was N1bn in 2015 against N1.2bn in 2014.

Customs and excise duties generated N514bn in 2015 against N566bn in 2014.

The report said that the low non-oil revenue performance suggested the ineffectiveness of the measures geared toward revenue increase as a result of the revenue diversification being pursued.

“These measures have to be re-invigorated in subsequent years to block revenue leakages and evasion of taxes and customs duties,’’ it said.

The report said that oil and non-oil contribution of net distributable funds were 52.95 per cent and 47.05 per cent, respectively, adding that there was no contribution from solid minerals as budgeted.

For the Excess Crude Account (ECA) created to serve as a stabilisation and savings fund, to augment budgets, the report showed that only N48.9bn was transferred into it in 2015 compared with N796.7bn in 2014.

It also said that N458.1bn was withdrawn from the ECA in 2015, while N927.3bn was withdrawn from it in 2014.

“Other than the distribution of N98.1bn shared among the three tiers of government, the withdrawal of N359.3bn for the payment of petroleum products subsidy, was in violation of Section 35 of Fiscal Responsibility Act (FRA) 2007.

“Such payment was clearly outside the scope of the ECA.’’

Giving an analysis of returns from Ministries, Departments and Agencies (MDAs) the report showed that N4.9bn independent revenue was remitted to the treasury by 25 MDAs in 2015 against N7.7bn remitted by 20 MDAs in 2014.

It said that only 15 MDAs submitted their Internally Generated Revenue returns for the four quarters of 2015, while eight made submissions for three quarters, and over half did not make any submissions at all.

The commission blamed non-compliance with the FRA as a major setback in collecting what was due to the treasury from the MDAs.

The FRA 2007 was enacted to promote prudent management of the nation’s resources, ensure long-term macro-economic stability and transparency in fiscal operations of the nation’s economy.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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