The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has advocated that cost of collection received by revenue generating agencies should henceforth be tied to their performance as a way of increasing revenue generation and remittances.

This advice was contained in a statement by the RMAFC Chairman Mr. Mohammed Bello Shehu where he gave highlights of payment of cost of collection to Revenue Generating Agencies from the Federation Account component. He explained that such a move would further encourage Revenue Generating Agencies (RGAs) to devise new strategies of enhancing revenue generation and remittances so as to attract more cost of collection.

“We strongly advocate that payment of the cost of collection to RGAs should be tied to revenue performance. In other words, each RGA should receive a cost of collection commensurate with the revenue generated against its revenue target in the as provided for in the Appropriation Act.”

The statement reveals that the Federal Inland Revenue Service (FIRS) received the sum of one hundred and fifteen billion, two hundred and twenty eight million, three hundred and seven thousand, fifty two Naira, thirty one Kobo (N115,228,307,052.31) and three billion, four hundred and seventy million, four hundred and twenty seven thousand, seven hundred and thirty eight Naira, sixty Kobo (N3,470,427,738.60) as the cost of collection on PPT/CIT and EMTL collections, respectively within the period.

The sum of N86,760,693,465.01 (Eighty six billion seven hundred and sixty million six hundred and ninety three thousand four hundred and sixty five Naira and one Kobo) was realized from the Electronic Money Transfer Levy (EMTL).

On VAT, the FIRS/NCS received the sum of N85,664,470,191.68 (eighty five billion six hundred and sixty four million four hundred and seventy thousand one hundred and ninety one Naira sixty eighty Kobo) as cost of collection in the same period, while the sum of N6,758,915,398.08 (six billion seven hundred and fifty eight million nine hundred and fifteen thousand three hundred and ninety eight Naira eight Kobo) was paid in the month of July, 2023 as Cancellation of Tax Credit from VAT.

From the Federation Account component, the NCS received the sum of N85,177,449,804.12 (eighty five billion one hundred and seventy seven million four hundred and forty nine thousand eight hundred and four Naira twelve Kobo) as the cost of collection for the period. Equally, the NUPRC received the sum of N62,758,464,676.03 (sixty two billion seven hundred and fifty eight million four hundred and sixty four thousand six hundred and seventy six Naira three Kobo) as the cost of collection for the period.

Similarly, the sum of N82,918,505,581.80 (eight two billion nine hundred and eighteen million five hundred and five thousand five hundred and eighty one Naira eighty Kobo)  and another N25,442,219,048.35 (twenty five billion, four hundred and forty two million two hundred and nineteen thousand forty eight Naira thirty five Kobo) refund was paid to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). This money was collected by NUPRC as a penalty for 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.

Speaking on revenue performances by the RGAs, the RMAFC Boss commended them on meeting their monthly revenue targets, where FIRS performed creditably well by achieving 206%, 149%, and 105% in the months of June, July and August 2023 which represent peak periods when companies file their tax returns as against its average performance in the months of February, April and October, 2023 with 66%, 57% and 60% respectively.

Similarly, NUPRC surpassed its monthly revenue target in only three months of September, October and November, 2023 while performing below average in other months, specifically in February and May 2023 with 37% and 31% collection respectively just as the Nigeria Custom Service equally exceeded its revenue target in only two months, August and October, 2023 while performing averagely in other months. However, in the months of February and April 2023, it achieved only 57% and 52% revenue collection, respectively.

On its part, the Ministry of Mines & Steel Development surpassed its monthly revenue targets in almost all the months except in April, August and September, 2023 where it achieved 98%, 97% and 96%, respectively recording a whopping 496% in the month of July, 2023. “Given its superlative performance, Government should give emphasis to the Solid Minerals sector to improve revenue generation therefrom and further achieve economic diversification.”

“In the area of VAT collection, a significant increase was recorded in the second half, with a collection of N2.148 trillion compared to N1.491 trillion realized in the first half of the year. This has shown an increase of N657 billion or 30.58%”.

There was a marginal increase in the revenue collected from the Electronic Money Transfer Levy (EMTL). The revenue realized in the second half was N86.761 billion compared to N83.024 billion in the first half of the year. This has shown a revenue increase of N3.737 billion or 4.31%.

In a related development, RMAFC decries the practice by some revenue generating agencies of financing ‘FGN Priority Projects’ insisting 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. “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 chunks of funds were deducted as first line charges under a similar name, i.e., ‘NNPC priority projects’. NNPCL should be made to promptly remit all revenues due to the Federation Account as at when due, in compliance with the provisions of the PIA, 2021”.

The RMAFC Chairman observed that at the moment, the Nigerian economy requires some pragmatic measures to bring it back on track to achieve the desired development and growth of the country. “In this respect, the Commission will continue to provide such periodic reviews on the Federation Account and wishes to appeal to the Government to support the Commission in its quest to block all revenue leakages and enhance the revenues of the 3-tiers of government as part of its function stipulated in the 1999 Constitution of the Federal Republic of Nigeria (as amended)”.

The Commission wholeheartedly support the Renewed Hope Agenda of President Bola Ahmed Tinubu, GCFR, as encapsulated in the Report of the Policy Advisory Council set up to support the delivery of sustainable and inclusive economic growth of the administration,

Mr. M.B. Shehu