From Isaac Anumihe, Abuja
Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) is an agency of the Federal Republic of Nigeria that oversees revenues accruing to the government and their disbursement from the Federation Account.
The agency also ensures that there is conformity and equity in the nation’s revenue allocation formula.
It equally encourages governors to fully harness the solid minerals in their states with a view to increasing their internally generated revenues.
Besides, it has the responsibility of fixing and determining the salary of the president, senate president and other political office-holders.
In this interview, Mohammed Bello Shehu, the chairman of the Commission, gives more insight into President Muhammadu Buhari’s salary, saying he does not earn more than N1.2 million a month.
He made other revelations regarding subsidy, economic diversification, multiple taxation, oil theft, salary disparities among civil servants and stamp duty.
Excerpts
Salary disparities in government-owned agencies
Well, like I said in another programme, there are about 17 different salary categories. There could be more. Disparity between a staff in CBN and in the ministry and various differences like that is not the responsibility of the Commission, but I can raise that as an issue which I have been doing and I feel that it is time for the stakeholders to take a look at this so that in such a disparity there can be some levels of harmonisation. If it is because of special skills the difference is not going to be that too wide which leaves a lot of room for corruption and other vices. And I have said also and I still stand by it that there should not be any public servant in Nigeria that will earn a salary more than the president of Nigeria. Even after he served as a political appointee for four, five or eight years that he shouldn’t get a severance package that is like 50, 60 or 100 times more than that of the president. That is my opinion and I stand by it anytime, any day.
On the issue of jumbo salary, there is no political office-holder or judicial officer in Nigeria that earns a jumbo salary. I have said it in public that the salary of the president is not more than N1.2 million a month and nobody earns higher than that not even the Chief Justice of the Federation or the Senate President. The salary of a minister after removing taxes is slightly under N1 million a month. This was from 2018 to date and you know some people will like to bring this issue up on the salaries of other workers that are not political appointees but in reality between 2008 to date how many times have the salaries of workers been reviewed? Many times. In 2008 I believe the minimum wage was around N5,000 but what is it today? So, there has been a lot of changes and like I said the commission is not responsible for that. We have National Salaries Incomes and Wages Commission (NSIWC) and I think they are working on it. I saw the chairman the other day and he said that they are working with the Head of Service (HoS) and stakeholders. They are trying to come up with a certain package that everyone will be satisfied with. I am not against workers. I am for good salaries and for good of workers. I believe, after working for 30 to 35 years you should be able to do well for yourself, own a house and do things that can sustain you. At the National Assembly nobody gets a jumbo salary. What people are mistaking it for is operational cost where when you are elected into the National Assembly you will have SA, constituency office – all approved depending on the size of your constituency. They monetise all those things. There is a structure within the National Assembly that is already in existence. In other words you have an SA and others that gets paid by their principal. In other democracies nobody will package such money and give the elected politician but for some reason Nigeria doesn’t practise that system. They monetise it and give it to the elected politicians. That is what people perceive to be jumbo salary. That is not jumbo salary but the salary of the Senate President is not more than N1 million.
Subsidy
Like I said from time to time we will put in our voices in Nigerian economic situations and as an organisation we are in support for the removal of fuel subsidy.
Whether it is going to be done gradually
When you look at the cost prime motor spirit (PMS) across West Africa Nigeria is the cheapest. So, we cannot be in the business of not only subsidising ourselves but also subsidising other countries. We need that money to be freed for the development of infrastructure in Nigeria. We can have good roads, good trains and give people opportunity. This idea of giving waivers to men and companies, a lot of them abuse the waivers and it is too much and I believe that it is time Nigeria should look into it because we are subsidising people that should not be subsidised. There are certain things that need to be given waivers. For example, if you are importing a machinery for a manufacturing business it is okay but don’t go and import ready-made products and assemble. You are not adding any value.
Multiple taxation
I urge Nigerians to be patriotic enough to pay their taxes. The number of people that pay taxes in the country should be hovering around 40 million and we are a nation of close to 200 million. If you say 100 million are living in extreme poverty what about the other 60 million? Any country that succeeds you will find out that its people are very patriotic. They are able to pay taxes. I am an advocate for Nigerians to pay taxes.
The concept of multiple taxes is based on peoples’ perception. Have you been to Malaysia or Ethiopia? These are developing countries. or Whatever service you pay for, our VAT is still very low. Check it out in comparison to other African countries. Go to South Africa. Without taxes you cannot even do much. Here, we rely on crude oil money to do what we want to do. You have to be taxed.
The one collected on the highway, how much does that bring? When you rent a hotel does that hotel remit the VAT to the relevant authority? Sometimes they don’t and there are many hotels around that remove the VAT and you as citizen, do you have any mechanism to check if your VAT was paid into the appropriate authority? FIRS has done a lot of reforms and are becoming more friendlier. You can go and pay in your tax. In general, Nigerians like to dodge tax. They don’t like to pay taxes.
Economic diversification
On economic diversification, we have programmes where we help states to look at the advantages they have on the best way they can increase their revenue. For example, we were in Bauchi State and there was an issue of gas flaring. So, we had to get agencies to handle such. Also, we showed them how to take advantage of agricultural products for exports. We brought other agencies that are responsible for teaching farmers and how to package their products, the type of fertilizer to use because when you have a product for export it is tested to ensure that it doesn’t have high level of pesticides before it goes out.
The commission is doing a lot and with more funding the commission will even do better and you will hear us in the news.
Oil theft
Well, I think it is unfortunate. A national asset is something that can sustain Nigeria for a long time. It is such a shame that after all these years, as a country we are not able to deal with it.
But I think now that from every sector in Nigeria – from the National Assembly to Mr President to the National Security Adviser —– our commission and all concerned Nigerians believe that this is the beginning of the end of this menace because Nigeria ought not to lose this number of millions of barrels and by extension billions of dollars. It came out in the news yesterday that they were talking of billions of dollars. And I think the commission will call on all stakeholders to rededicate their efforts to make sure that this issue is finally dealt with and attacked upfront because if we don’t do this it will be part of hemorrhaging or leakage of revenue done by some criminals and unscrupulous elements. I also understand that the navy and the military are doing very well in terms of getting to the bottom of these things. It is like a cartel. It is not only Nigerians. They have their collaborators that come from whatever country. They come to the Nigerian waters and steal these products. So, as a commission, our Department of Crude and Gas and our committee on Crude and Gas are also working to intervene together with the documents that will be presented to us. We will look into how some of these things could be curtailed based on information given to us. As a commission we call on all agencies from NNPC Ltd to everybody concerned to rededicate their efforts so that Nigeria can finally stop this level of stealing our oil.
Stamp duty
On stamp duty, I think in the Finance Act of 2021, there was a clarity on who should be responsible but I don’t think we are talking about the stamp duty now. We are talking about the previous collected stamp duty before the new law came. So, I will say as a commission we were one of the first stakeholders in the debate of stamp duty before even the Attorney General came in. Then the Ministry of Communication. Then NIPOST. Then FIRS but our call is that whatever the veracity of the allegations or counter allegations, I think it’s about time these things be looked at holistically. Let’s try to find out what is the actual true position. There must be some elements of truth to some of the allegations. Maybe, these allegations may not be as stated or as exaggerated. But I think that stakeholders should decide. They should have a stakeholders’ engagement where the true situation will be brought out. Is there some other money somewhere that is not remitted? Let’s find out the facts. All responsible stakeholders must be able to come together and settle it so that the true situation can be allowed. We are going to bring this issue before the plenary. Next plenary in January we are going to debate it and we will have people that will come and guide us and present our findings to the President of the National Assembly.
Why was RMAFC set up?
This is a commission that came into being from the military era sometimes by Decree 89 around 1989 or so. It was under the presidency and then the Act was changed and then in the 1999 Constitution, it was amended. It formed one of the 14 federation commissions charged with the responsibility of mobilising revenue and also allocation. If you look at the relevant sections of the constitution you will see that the constitution empowers the commission to, among others, monitor allocation approvals and disburse revenue to the federation. That means that whatever stands as revenue in the constitution is collected and sent into the federation account. The revenue will be shared based on the existing formula between the federal government, state governments and 774 local governments. The agency also reviews from time to time the revenue allocation formula.
What we have in existence now is from the era of the military. The Act was modified by former President Olusegun Obasanjo and there have been attempts by the commission to review. We just completed the exercise last year. A full report was forwarded to the president and at some point we are supposed to forward it to the National Assembly. The constitution says from time to time we review looking at the present reality of Nigeria. The Commission is still using the old formula when the states and the local governments were not so many. Remember, Abacha created some six states and then some other local governments.
We advise the federal and state governments on fiscal efficiency and methods by which they can increase and enhance their Internally-generated revenue.
Another constitutional responsibility is to determine the renumeration appropriate for political office-holders. If you look at Section 84 of the constitution, it also includes judicial offices. That is, the judicial system of the Federation ——– Chief Justice of the Federation, High Court Judges and other judges in the country. It is the responsibility of the commission to determine their salaries and allowances that is appropriate for them. Which of course, if you have been following the news, the commission has embarked on this exercise. Additionally, there is a directive by Mr President that we should prioritise the salaries of the judicial officers and there are certain peculiarities which are given to us by the parliament or Mr President now. This is what the constitution says. The Act also empowers the commission to monitor or obtain information from any government agency as it relates to revenue. We have that constitutional right in our Acts to ask any agency under the federal government where their revenue came from and how they used it. Such places mentioned in the act include, the defunct Nigerian National Petroleum Corporation (NNPC) which is now NNPC Ltd; Department of Petroleum Resources (DPR) and Federal Inland Revenue Service (FIRS) and then the Nigeria Custom Service (NCS). These were the ones that were with Ministry of Finance and Central Bank of Nigeria (CBN). The act also covers other entities like Nigerian Communications Commission (NCC), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Civil Aviation Authority (NCAA), Shippers Council, name it. We have the rights to look into their books, demand for information to know where the revenue they are generating is going. Whether it is going to the appropriate place. So, this is in a nutshell the summary of what the commission does. And the commission is represented by commissioners drawn from each state of the federation. We have full-time chairman and secretary. We have a staff strength of over 830 and today we have 31 offices across Nigeria. We have 15 directorates plus the headquarters. We are also members of the Joint Task Force (JTF) and statutory members. We are members of the Niger Delta Development Commission (NDDC), statutory members and joint members of the local governments accounts and ecological funds statutory members.
Why does the commission want to review the revenue formula?
Well the last time this exercise was done was in 2007 to 2008. The review is a process. We operate by committees. There is a committee on rumenaration and monetisation. The committee has 15 members who are commissioners. How the process is done is that we will request for inputs from all the various stakeholders across Nigeria. We will request for inputs from National Bureau of Statistics, (NBS). We will request from social activists and Non Governmental Organisation (NGOs) and people that have interest to comment. They will also subject whatever data information they get to some scientific analysis. What was life in 2008? What are the current situations? All these are done before finally a decision is taken. But like I explained before. The judicial officers are the first on the list to do and we hope to complete it by the end of January next year.
Then later down the line we will continue with the other processes.
Contrary to the perception of people the review is not only about salaries. There are issues of allowances. There are issues of lapses in the existing law. because The salaries of career ambassadors will be completely different from a non-career ambassadors. The non-career ambassadors have the salary of a Deputy Director in the Ministry. So, we felt that has to be addressed and there are some other agencies that were created and changed whereby the head executive was elevated to an executive vice chairman and the president is the chairman of that agency and he presides over a meeting of various Managing Directors (MDs) and the presiding officer and those managing directors earn the same salary and same allowances. So, based on their new acts the commission would look at it and try to see how they can correct some of these anomalies so that’s what we do and we have started the process already.
Information gathering
Well, I think as a law-abiding commission, we always comply when we are being summoned by the National Assembly. For those who don’t comply on data submission we personally have gone to the National Assembly. We have complained but you know the National Assembly is facing the same. In the proposed amendment of the constitution they are going to give some agencies some enforcing powers so that we can be able to sanction any entity of the government that refuses to abide to our request for information there is going to be some sanction and in the proposed constitutional amendments we are aware that this is included. And then there is the issue of revenue where some agencies sometimes are required to spend 80 per cent of what the generate but in many cases they spend the entire amount of money. In order words if they make N49 billion they spend the whole N49 billion. When you look at it and analyse their books, you find out that it leaves a lot of questions to be answered. Not only that, you see bogus purchases of certain things. For example the buy recharge cards for certain amounts and other things but I think the National Assembly is trying to see how those agencies can be sanctioned.
How does the commission encourage states increase their IGR?
What I will like Nigerians to know about the commission is that the commission is working very hard and it is well represented by the federal and state levels and we are up to the task of not only disbursing funds only and monitoring approvals but also in mobilisation. We have programmes where we help states to look at the advantages they have on the best way they can increase their revenue whether partnering with Bank of Industry, (BoI, Bank of Agriculture (BOA) and other entities that were set up to make business and manufacturing and others very easy.
The commission always intervenes, gives them direction by organising stakeholders engagement. For instance, in Bayelsa last year we had a programme on how the gas flaring can be stopped harnessed and we had a lot of private sector involvement. The governor was there. The committee was present. I was there and as a result of that engagement someone is establishing an industry there based on the information that he got and the access point he was exposed to in order for the state to benefit from it and help people get employed.
So, the commission is doing very much on that. On the issue of disbursement of approvals we have been doing that monthly and unfailingly. That means the money comes and it is shared accordingly into certain indices. Thirteen per cent derivatives is given to oil- producing states and 13 per cent is given to states from the solid minerals sector. This money from the centre is also being shared to the three tiers of government appropriately. For the last 40 years, nobody got a dime from solid minerals because of people who were exploiting these things for their own personal reasons or benefits. But now I think we should concentrate more to make it a real profitable business organisation and the Solid Minerals Development Funds is just being funded by the federation to be able to provide more data to pull in prospective investors across the world so that some of the big companies can come in and exploit some of the resources that we have not only exploiting and exporting but we want a situation where they will come and add value to it. That means get the minerals here, process them, sell the finished products out so that along the line people are going to benefit from it.
How do you respond to calls by states to increase derivation to 50 per cent?
Well, I think that is a constitutional issue. The constitution says it is 13 per cent but in the new Petroleum Industry Act (PIA), when you add in total what the producing communities are going to get it is more than that 13 per cent. That is a very political question and I will leave it to the politicians to answer. What we do here is to implement what is in the constitution.