Connect with us

Economy

FG Records N2.3tn Shortfall From Revenue-earning Agencies

Published

on

interbank
  • FG Records N2.3tn Shortfall From Revenue-earning Agencies

Between January 2015 and August 2018, the Federal Government recorded a total shortfall of N2.38tn in independent revenue from its agencies captured under the Fiscal Responsibility Act.

The Act stipulates that any government agency that generates revenue must remit 80 per cent of their operating surplus to the Consolidated Revenue Fund account.

Some of the agencies are the Central Bank of Nigeria, Nigeria Deposit Insurance Corporation, Securities and Exchange Commission, Nigerian Shippers Council, Nigerian Export Promotion Council, National Health Insurance Scheme, Nigerian Civil Aviation Authority, and Nigerian Communications Commission.

Over the years, many of the agencies have been underpaying revenue into the coffers of the government.

The development made the Director-General, Budget Office of the Federation, Ben Akabueze, to summon a meeting of the heads of the affected agencies to discuss how to address the revenue shortfall.

Speaking at the event on Tuesday in Abuja, Akabueze described the revenue performance of some of the agencies as “mostly insignificant.”

For instance, he said that between 2015 and August 2018, out of the cumulative budgeted revenue of N3.65tn, the actual revenue received during the period was just N1.27tn.

Giving a breakdown of the revenue for the period, the DG said that in 2015, the budgeted independent revenue of the government was N489.25bn, out of which N354.03bn was generated.

For 2016, he said the government was more ambitious by setting a target of N1.5tn only for the agencies to realise just N398.19bn.

He said the poor revenue performance made the Federal Government reduce the 2017 target to N807.57bn.

However, he said the actual collection was worse than what was earned in the previous years as only N216.66bn was the actual amount generated.

For the 2018 fiscal period, he said the revenue target was pegged at N847.95bn noting that about N302.66bn had been generated as revenue.

About 50 government-owned enterprises that generate independent revenue have yet to remit their operating surpluses running into over N2tn.

Some of the agencies, according to the presentation made by the Akabueze, are the Petroleum Products Pricing Regulatory Agency, N1.34tn; Central Bank of Nigeria, N801.18bn; Nigeria Ports Authority, N192.1bn; Nigerian Maritime Administration and Safety Agency, N66.08bn; and the Federal Airport Authority of Nigeria, N51.99bn.

The Nigerian Postal Service has yet to remit its operating surplus of N37.74bn; Nigerian Communications Commission, N30.85bn; National Inland Water Ways Authority, N30.83bn; National Information Technology and Development Agency, N30.7bn; and Nigerian Airspace Management Agency, N22.79bn.

Similarly, the National Examination Council has yet to remit its operating surplus of N16.3bn; Nigerian Television Authority, N15.64bn; Nigerian Shippers Council, N11.99bn; National Health Insurance Scheme, N8.81bn; National Pension Commission, N8.68bn; Corporate Affairs Commission, N7.71bn; and Standards Organisation of Nigeria, N5.5bn, among others.

Akabueze said, “The continuous underperformance of the government -owned enterprises has made it difficult to achieve enhanced domestic revenue mobilisation from operating surpluses of the GOEs.

“The President has mandated that urgent corrective action should be taken and for this reason, we have gathered here today.

“Despite the over N40tn the Federal Government has invested in the agencies, what is usually remitted to the treasury in terms of dividends or surplus at the end of each operating year is mostly insignificant.

“The record shows that few of the GOEs declare surpluses. In effect, the Nigerian taxpayers have not benefitted much from these investments.

“Out of the total projected sum of N807.57bn independent revenues in 2017, only N216.66bn, representing 26.8 per cent performance, was remitted by GOEs and revenue-generating Ministries, Departments and Agencies.”

He said, going forward, the Federal Government would strengthen its control mechanism to make the revenue process more transparent and inclusive.

To achieve this, Akabueze said reforms would be implemented with increased vigour to improve revenue collection and expenditure management.

He said achieving fiscal sustainability required bold, decisive and urgent action, adding that the budget performance between January and September had shown clearly that the country had a “serious revenue challenge.”

He gave some of the initiatives being taken to address the problems to include the deployment of new technology to improve the collection, upward review of tariffs and tax rates, stronger enforcement action against tax defaulters and tighter performance management framework.

He also said the government would be implementing tight expenditure control through the issuance of circulars to limit allowable expenses, the frequency of board meetings and other wasteful practices.

“Annual GOE capital budget may be mainstreamed into the Federal Government capital budget in order to ensure that they are subjected to the same level of scrutiny, procurement and monitoring processes.

“It shall be mandated for all GOEs to use the Treasury Single Account for all financial transactions. The accounts of GOEs shall henceforth be audited within five months after the end of each financial year,” he added.

Akabueze explained that the government would be amending relevant sections of the Acts establishing some of the agencies to reflect the economic realities and policy thrust of the government.

He said the need to amend the Act became imperative as some establishing Acts empowered the boards of agencies to serve as final approving authority over their spending plans.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

FIRS Sets N5.9 Trillion Revenue Target for 2021

Published

on

firs

FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

Continue Reading

Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

Published

on

governor-udom-emmanuel

The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

Continue Reading

Economy

ICPC Says Nigeria Loses $10bn to Illicit Financial Flows 

Published

on

Naira Dollar Exchange Rate

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says Nigeria accounts for 20 per cent or 10 billion dollars (N3.8 trillion) of the estimated 50 billion dollars that Africa loses to Illicit Financial Flows (IFFs).

Chairman of ICPC, Prof. Bolaji Owasanoye, said this during a virtual meeting to review a report on IFFs in relation to tax, Mrs Azuka Ogugua, spokesperson for ICPC, said in a statement released in Abuja on Friday.

The ICPC Chairman said, “the African Union Illicit Financial Flow Report estimated that Africa is losing nearly 50 billion dollars through profit shifting by multinational corporations and about 20 per cent of this figure is from Nigeria alone.”

The ICPC boss explained that taxes played “very strategic role in the nation’s political economy.”

He said the objective of the meeting was to improve on the awareness on IFFs, especially in the areas of taxation.

The ICPC boss added that the meeting would give participants the opportunity to openly discuss how to effectively use the instrumentality of taxation to curb IFFs through risk-based approach.

“Risk-based approach, that is: monitoring and audit; due process in tax collection; structured tax amnesty framework skewed in public interest; data privacy; timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies,” he said.

Owasanoye also stated that for the contemporary tax man to remain relevant, he must build his capacity in areas of technology management, solution architects and an astute relationship manager.

The Executive Chairman of Federal Inland Revenue Service (FIRS) Mr Muhammad Nani, expressed concerns that IFFs posed a serious threat to the Nigerian economy as the act robbed the nation of resources that were needed for development.

Nani declared that tackling IFFs would expand the country’s tax base and improve revenue generation, which was required for development.

He consequently pushed for policy reforms that would make it difficult for “capital flights” from occurring so that the country would be placed on the path of growth.

Other discussants at the event identified weak regulatory framework, opacity of financial system and lack of capacity amongst others as some of the factors that fuelled IFFs.

The discussants emphasised the need for capacity building of relevant stakeholders as one of the ways to stamp out illicit financial flows.

They commended ICPC for leveraging its corruption prevention mandate to open a new vista in IFFs discourse in Nigeria. (NAN)

Continue Reading

Trending