The budgets of revenue generating agencies such as Nigerian National Petroleum Corporation, Central Bank of Nigeria and Federal Inland Revenue Service will soon be captured in the national budget.
This is to stop the current practice of sending separate budgets to the National Assembly, the Director General, Budget Office of the Federation, Mr. Ben Akabueze, has said.
Speaking to Chief Executive Officers (CEOs) of Government Owned Enterprises (GOE) at a townhall meeting in Abuja, yesterday, the DG Budget said government had decided to go hard on revenue generation because of the refusal of GOEs to remit their operating surpluses to the national coffers.
He said after investing about N40 trillion cumulatively in Government Owned Enterprises(GOE) and recording less than one percent return on actual performance, the Federal Government has declared a state of emergency on revenue generation in the country.
He said it is “envisaged in both in Executive Order 2 (EO2) and 2019 MTEF that is why we have gathered here today to basically elaborate on the provisions of these reference documents and to create a forum for interaction and if there is valid feedback for us to take back to the presidency on the subject to do so.”
“Later today (yesterday) at 4pm in the office of chief of staff we will be meeting with the heads of the agencies on whose shoulders even the bigger burden on revenue generation rests. We will be meeting with the Chairman of FIRS, CG of customs, the GMD of NNPC, Mines and Steel Development, the Central Bank and Department of Petroleum Resources,” he said.
He however cautioned that when the agencies’ budgets are captured in the national budget, they should still honour the call of the National Assembly to defend them as they usually do but that the practice of sending separate budgets to the National Assembly “is an aberration”.
The Federal Government is unhappy that many GOEs are owing the federation accounts trillions of naira in unremitted operating surpluses. For instance, the Petroleum Products Pricing Regulatory Agency (PPPRA) alone has N1,343,194,015,405.79, yet to be remitted to the coffers.
Some of the initiatives being taken to address the revenue problem include: deployment of new/improved technology on revenue collection; upward review of tariffs and tax rates where appropriate; stronger enforcement action against tax defaulters and tighter performance management framework for Government Owned Enterprises (GOEs).
It was learnt that government also hopes to increase the 64% collection efficiency of the Nigeria Customs Service up to 90%.
Many GOEs did not comply with EO2 provisions this year and many didn’t send their budgets before end of July.
As part of the state of emergency to be declared on revenue generation, it shall be mandatory for all GOEs to use the Treasury Single Account (TSA) for all financial transactions; quarterly remittance of interim operating surplus by the GOE shall replace the annual remittances while cumulative remittances at the end of the year will be reconciled to amount due after audit.
Also, the accounts of GOEs shall henceforth be audited within four months after the end of each financial year; while the computation of the operating surplus shall be reviewed to allow the deduction from the agency’s revenues of only operational expenses, wholly, reasonably and necessarily incurred in its operations.