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FG Bars MDAs From Spending Internally Generated Revenues

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Federal Inland Revenue Service- Investorsking
  • FG Bars MDAs From Spending Internally Generated Revenues

To stop the high incidence of unremitted operating surpluses that stood at N450bn as of last year, the Federal Government has barred its Ministries, Departments and Agencies from spending Internally Generated Revenues that are not appropriated in their annual budgets.

Also, declaring deficits will no longer provide an escape route for the MDAs to avoid payment of operating surpluses, investigation has shown.

According to a new template for reporting and payment of operating surpluses by the MDAs, which will soon be launched, the Federal Government says the presence of deficit in the account of an MDA can actually indicate an operating surplus hidden under unauthorised expenses.

Investigation showed that the new template, which is a guide to the MDAs on the payment of operating surpluses, would bar them from spending their IGR unless such funds had been appropriated in the respective MDAs’ budgets for the year.

It also specifies some items that the MDAs are barred from spending money on, which hitherto had prevented them from paying operating surpluses to the Consolidated Revenue Fund of the Federal Government.

The Fiscal Responsibility Commission Act, 2007 specifies that the MDAs should remit 80 per cent of their annual operating surpluses to the Consolidated Revenue Fund, but many of the MDAs have been accused of spending their operating surpluses.

The Ministry of Finance recently revealed that 33 MDAs failed to remit a total of N450bn resulting from their operating surpluses between 2010 and 2015.

Our correspondent learnt that the new template mandated investigating authorities, which could be the Office of the Accountant General of the Federation or the Fiscal Responsibility Commission to scrutinise deficit accounts of the affected MDAs in order to identify and remove unauthorised expenditures.

Sources close to finance authorities told our correspondent in Abuja on Thursday that the measure had become necessary in order to boost government revenues in view of the dwindling income from the nation’s oil resources.

The Minister of Finance, Mrs. Kemi Adeosun, had recently disclosed fresh moves by the Federal Government to recover N450bn from the MDAs, which they failed to remit between 2010 and 2015.

According to her, demand notices have been issued to 33 agencies, which are responsible for the unremitted funds. The agencies include the Corporate Affairs Commission, Nigerian Communications Commission, Nigerian Maritime Administrative and Safety Agency and the Nigerian Ports Authority.

The articulation of a new template was consequent upon the audit of the accounts of the concerned agencies that revealed massive unremitted funds by the 33 agencies of the Federal Government.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Economy

President Tinubu Approves Concrete Redesign for Abuja-Kaduna Road Amid Contract Termination

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lekki

The Federal Government has announced plans to address the difficulties faced by road users on the Abuja-Kaduna-Zaria-Kano road with the redesign of the dual carriageway.

This announcement was made by the Minister of Works, David Umahi via a statement on Wednesday.

The Ministry revealed that the 127 kilometers project has been approved by President Bola Tinubu.

This development comes two days after the Ministry of Works announced the termination of its contract with Julius Berger for the Section I (Abuja-Kaduna) of the Abuja-Kaduna-Zaria-Kano Dual Carriageway project in FCT, Kaduna, and Kano States.

Investors King understands that the contract for the rehabilitation of the road was awarded to Messrs Julius Berger (Nig.) Plc on December 20, 2017.

The project, initially valued at N155.7 billion, with a 36-month completion period was further categorized into three sections.

However, only Section II (Kaduna-Zaria) has been completed and partially handed over.

Section III (Zaria-Kano) is partially finished while Section I remains in a severely deteriorated state.

A statement from the Ministry explained that the decision to terminate the contract with Berger was based on non-compliance with reviewed cost, scope, and terms, stoppage of work, and refusal to remobilise to site.

The ministry on Wednesday, November 6, confirmed that Section I has been redesigned and re-scoped.

The statement reads, “The President, His Excellency, Bola Ahmed Tinubu, GCFR has approved that the remaining 127 kilometres of the Rehabilitation of Abuja – Kaduna – Zaria – Kano Dual Carriageway, Section I (Abuja – Kaduna) be redesigned using continuously reinforced concrete pavement (CRCP) instead of the present asphaltic one.”  

“The contract, divided into three (3) sections, was awarded to Messrs Julius Berger (Nig.) PLC on 20th December 2017 at an initial sum of N155, 748,178,425.50 billion (one hundred and fifty-five billion, seven hundred and forty-eight million, one hundred and seventy-eight thousand, four hundred and twenty-five naira, fifty kobo) with a completion period of thirty-six (36) months.” 

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Economy

Tax Expert Warns Tinubu: VAT, PAYE Hikes Will Deepen Hardship for Nigerians

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Company Income Tax (CIT) - Investors King

Due to Nigeria’s economic situation, tax expert Adebisi Oderinde has urged President Bola Ahmed Tinubu to halt plans to increase the VAT and Pay-As-You-Earn (PAYE) tax rates.

Oderinde, who is also the CEO of AOC-Adebisi Oderinde & Co, made the statement during the inauguration of the company’s Head Office in the Kara area of Ogun State.

He said the country’s economic conditions are challenging and particularly unfavorable for SMEs and warned that implementing tax reform could destabilize many small businesses as inflation has already eroded purchasing power in Nigeria.

With over 28 years of experience as a tax consultant, Oderinde noted that new tax reforms would likely worsen hardship across the country.

“My advice is to make hay while the sun shines, as the journey of a thousand miles begins with a single step, and slow and steady wins the race. The country is hard! As a tax practitioner, I continue to pray for our President, but he must heed the advice of elders, especially when it concerns tax reform,” he said.

“This is not the right time to reform any tax, nor to adjust rates. Nigerians’ purchasing power is very low. While some may think of VAT reform as beneficial, it would have a negative impact, especially on Lagos State. One part of the reform aims to cancel the consumption tax, which would hit Lagos hard, as the state earns more from consumption tax than any other state in the federation,” he added.

Oderinde further advised northern Nigeria not to support the proposed policy, warning it could disproportionately affect the region.

“They also want to increase PAYE, and recent data from the NBS in 2023 shows that the total IGR from the 36 states plus the FCT is about N2.4tn, with PAYE accounting for about 63%. If PAYE is raised, it will impact many states significantly. Instead of focusing on VAT, the northern states should consider that an increase in PAYE would affect them even more than VAT,” he explained.

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Economy

Power Restored Hours After Lastest Grid Collapse

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Electricity - Investors King

Electricity has been restored in some parts of the states that were hitherto affected by the nation’s power grid collapse.

Investors King gathered that some states including Lagos, Osun, Federal Capital Territory among others now have light.

Recall that the Transmission Company of Nigeria (TCN) had on Tuesday announced the latest National Grid collapse.

Checks by Investors King, however, revealed that the last disruption was the tenth time Nigeria would be experiencing total blackout due to grid collapse in about nine months in 2024 alone.

The situation has been raising concerns from Nigerians and other stakeholders even as others alleged that the collapse has led to inferno in people’s homes among other property destruction.

The General Manager of TCN Public Affairs, Ndidi Mbah, had assured members of the public that the grid collapse which occurred at 1:52 pm on November 5 would be speedily fixed.

The GM revealed that the grid collapse was caused by line and generator trippings, adding that efforts were on to rectify it.

Mbah had disclosed how the national grid experienced a partial disturbance due to a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Each time the disruption through citizens into darkness, businesses are affected as many Nigerians task the Federal Government to tackle the menace.

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