From Uche Usim, Abuja
As Nigeria battles low fund challenges, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) on Wednesday disclosed that N5,244,037,636,561.60 has accrued into the federation account for the period January to June this year.
The record is as was captured in the monthly report to the Federation Account Allocation Committee (FAAC) by the Central Bank of Nigeria (CBN) under the caption “CBN Federation Account Component Statement”.
In a statement signed by the RMAFC Chairman, Mr. Mohammed Bello Shehu, out of the total gross revenue inflows into the federation account, N627,301,922,426.35 was from the Nigerian National Petroleum Company Limited (NNPCL) Joint Venture Petroleum Profit Tax (PPT) due, captured and recorded by the Federal Inland Revenue Service (FIRS), but utilized by the NNPCL for other federal government’s obligations.
According to the statement, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) remitted the sum of N823,512,065,893.15, while the Federal Inland Revenue Service (FIRS) made a gross collection of N3,655,894,989,129.28 but remitted N3,028,593,066,702.93, retaining the difference as cost of collection.
The statement further disclosed that the Nigeria Customs Service (NCS) on its part remitted the sum N764,630,581,539.17.
It however, added that the Nigerian National Petroleum Company Limited (NNPCL) did not remit any amount into the Federation Account during the period either as profit revenue or other revenues as contained in the Petroleum Industry Act (PIA), 2021 as its revenue performance could not be assessed because neither its revenue target was disclosed nor its revenue remittance to the Federation Account was provided.
Furthermore, the statement adds that the sum of N1,490,946,180,918.52 was realized as Value Added Tax (VAT) while N83,024,395,855.89 was realized from the Electronic Money Transfer Levy (EMTL) from which N3,320,975,834.23 was paid to the FIRS as cost of collection.
Additionally, the FIRS received N82,031,796,937.01 as cost of collection on PPT/CIT and EMTL collections respectively in the period.
The report revealed that on VAT, the FIRS/NCS together received N59, 593,164,213.83 as cost of collection within the period under review.
Similarly, the report indicates that N16, 680,990,990.93 was realized from the solid minerals sector.
The RMAFC Chair further revealed that total collections from VAT netted N1,387,328,862,898.16 which was shared to the 3-tiers of
government in accordance with the approved VAT sharing formula.
“Furthermore, N1,117,075,572.57 paid in the month of March, 2023 as Consultancy Fee on VAT”.
On the statutory allocations to the three tiers of government, Mr. Bello disclosed that the net sum of N3,069,594,889,669.74 was shared to the 3-tiers of government in the period January to June, 2023.
In the area of payment of cost of collection to Revenue Generating Agencies (RGAs) from the Federation Account component, the statement reveals that the NCS received N53,524,140,707.73, while the NUPRC received N33,961,852,403.53 within the period under review.
In the same vein, the statement adds that N48,105,698,218.35 was paid to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
“This money was collected by NUPRC as penalty on gas flared. Revenues on gas flared penalty used to be Federation Account revenues before the PIA, 2021 which provided that such revenues should be paid 100% to the NMDPRA”.
In a similar development, the RMAFC Chair described the statutory deductions which constituted 32.27% of the total gross inflow into the federation account in the six month period as superfluous and constitute a drain on the federation account.
Mr. Shehu also disclosed that N1,692,591,243,111.06 was deducted at source by the OAGF as approved statutory deductions; with a further deduction of N70,000,000,000 by the FIRS under the name of the FIRS Priority Projects in the second quarter.
The Chairman observed that the Nigerian economy at the moment requires some pragmatic measures to enhance distributable revenues for the three tiers of government for the overall development and growth of the country.
According to the statement, the Commission made far-reaching recommendations on the operations and management of the Federation Account with particular reference to: Payment of cost of collection to RGAs which should be tied to revenue performance where each RGA should receive cost of collection commensurate to the revenue generated against its revenue target in the Appropriation Act; the need for the government to review the payment of 100% (less cost of collection) revenue realized from gas flared penalty to the NMDPRA as Gas flared penalty was hitherto a Federation Account revenue component taken over by the PIA, 2021.
Other recommendations include the need to review, holistically, all legislations with respect to statutory deductions to allow for increase in the amount to be shared among the 3-tiers of government; Greater emphasis on the Solid Minerals sector to improve revenue generation therefrom and further achieve economic diversification; No further deduction should be made by FIRS in the name of ‘priority projects’ to avoid a repeat of the situation under NNPC where large chunk of funds were deducted as first line charge under similar name, i.e. ‘NNPC priority projects’; and All accruals due on 13% Derivation should be deducted as at when due to avoid refunds in future.