The Revenue Mobilisation Allocation And Fiscal Commission (RMAFC) has disclosed that the total sum of N5,244,037,636,561.60 (Five trillion, two hundred and forty four billion, thirty seven million, six hundred and thirty six thousand, five hundred and sixty one Naira, sixty Kobo has accrued into the Federation Account for the period January to June, 2023 as 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 press statement signed by the RMAFC Chairman, Mr. Mohammed Bello Shehu and distributed to newsmen in Abuja, the Commission reported on the total revenue that accrued into the Federation Account from January to June, 2023.
According to him,of the total gross revenue inflows into the Federation Account, the sum of N627,301,922,426.35 (Six hundred and twenty seven billion, three hundred and one million, nine hundred and twenty two thousand, four hundred and twenty six Naira, thirty five Kobo) was NNPCL JV Petroleum Profit Tax (PPT) due, captured and recorded by the FIRS, but utilized by the NNPCL for other federal government obligations.
The statement said,the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) remitted the sum of N823,512,065,893.15 (Eight hundred and twenty three billion, five hundred and twelve million, sixty five thousand, eight hundred and ninety three Naira, fifteen Kobo) while the Federal Inland Revenue Service (FIRS) made a gross collection of N3,655,894,989,129.28 (Three trillion, six hundred and fifty five billion, eight hundred and ninety four million, nine hundred and eighty nine thousand, one hundred and twenty nine naira, twenty eight kobo) but remitted N3,028,593,066,702.93 (Three trillion, twenty eight billion, five hundred and ninety three million, sixty six thousand, seven hundred and two naira, ninety three kobo) 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 (Seven hundred and sixty four billion, six hundred and thirty million, five hundred and eighty one thousand, five hundred and thirty nine Naira, seventeen Kobo).
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.
The statement adds that the sum of N1,490,946,180,918.52 (One trillion, four hundred and ninety billion, nine hundred and forty six million, one hundred and eighty thousand, nine hundred and eighteen Naira, fifty two Kobo was realized as Value Added Tax (VAT) while the sum of N83,024,395,855.89 (Eighty three billion, twenty four million, three hundred and ninety five thousand, eight hundred and fifty five Naira, eighty nine Kobo) was realized from the Electronic Money Transfer Levy (EMTL) from which the sum of N3,320,975,834.23 (Three billion, three hundred and twenty million, nine hundred and seventy five thousand, eight hundred and thirty four Naira, twenty three Kobo) was paid to FIRS as cost of collection.
Additionally, the FIRS received the sum of N82,031,796,937.01 (Eighty two billion, thirty one million, seven hundred and ninety six thousand, nine hundred and thirty seven Naira, One Kobo) and N3,320,975,834.23 (Three billion, three hundred and twenty million, nine hundred and seventy five thousand, eight hundred and thirty four Naira, twenty three Kobo) 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 the sum of N59, 593,164,213.83 (Fifty nine billion, five hundred and ninety three million, one hundred and sixty four thousand, two hundred and thirteen Naira, eighty three Kobo) as cost of collection within the period under review.
The report indicates that the sum of N16, 680,990,990.93 (Sixteen billion, six hundred and eighty million, nine hundred and ninety thousand, nine hundred and ninety Naira, Ninety three Kobo) was realized from the solid minerals sector.
The RMAFC Chair added that total collections from VAT netted the sum
of N1,387,328,862,898.16 (One trillion, three hundred and eighty seven billion,
three hundred and twenty eight million, eight hundred and sixty two thousand, eight
hundred and ninety eight Naira, sixteen Kobo which was shared to the 3-tiers of
government in accordance with the approved VAT sharing formula.
“Furthermore, the sum of N1,117,075,572.57 (One billion, one hundred and seventeen million, seventy five thousand, five hundred and seventy Naira, fifty seven Kobo) was 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 (Three trillion, sixty nine billion, five hundred and ninety four million, eight hundred and eighty nine thousand, six hundred and sixty nine Naira, seventy four Kobo 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 the sum of N53,524,140,707.73 (Fifty three billion, five hundred and twenty four million, one hundred and forty thousand, seven hundred and seven Naira, seventy three Kobo) while the NUPRC received the sum of N33,961,852,403.53 (Thirty three billion, nine hundred and sixty one million, eight hundred and fifty two thousand, four hundred and three Naira, fifty three Kobo) within the period under review.
The statement added that the sum of N48,105,698,218.35 (Forty eight billion, one hundred and five million, six hundred and ninety eight thousand, two hundred and eighteen Naira, thirty five Kobo) 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”.
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 the sum of N1,692,591,243,111.06 (One trillion six hundred and ninety two billion five hundred and ninety one million two hundred and forty three thousand one hundred and eleven Naira six Kobo was deducted at source by the OAGF as approved statutory deductions; with a further deduction of the sum of N70,000,000,000 (Seventy billion Naira) by the FIRS under the name of 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.
“This is to guarantee accountability, probity and transparency in the management of
the Federation Accounts and disbursements to the 3-tiers of government”.
The Commission also recommended that all NNPCL JV PPT should be paid to the Federation Account through FIRS, i.e. such taxes should not be retained by the company in the name of financing FGN priority projects; and NNPCL should be made to remit promptly all revenues due to the Federation Account as at when due in compliance with the provisions of the PIA, 2021.
The Chairman reiterated the commitment of the Revenue Mobilization Allocation
and Fiscal Commission in ensuring the elimination of opacity in the management of
the country’s commonwealth and promoting prudence, transparency and
accountability in line with the new administration’s Renewed Hope Agenda which
promises a new era for economic growth and development.