N6.39trn budget deficit: NASS, MDAs disagree on 80% revenue remittance into Federation Account

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…We’ll be rigid on MDAs to generate  more revenue —  Senate President

…Fiscal Responsibility Act confusing, impracticable —  Comptroller General, Customs

By Moses Adeniyi & Abimbola Abatta

The National Assembly is set at loggerheads with revenue generating Ministries, Departments and Agencies (MDAs) of the Federal Government over demands of revenue generation and remittances into the Federation account of the Federal Government.

The contention was borne by the need to generate more revenue to address the whooping N6.39trillion overall deficit in the 2022 N17.162trillion  budget,  representing 3.46percent of the Country’s gross domestic product.

This is as the Senate on Monday made a case for generation and remittance of not less than N3 trillion from the MDAs annually into the coffers of the Federal Government.

Senate President, Ahmad Lawan, in an address delivered to declare open an interactive session “on the need to improve internally generated revenue of the Federal Government of Nigeria and Revenue Projections of the Agencies as Contained In the Appropriation Act 2022,” on Monday, mentioned that revenue generating agencies of the Federal government have the wherewithal to generate and remit a sum to the tune of N3 trillion  annually to the coffers of the Federal Government if efforts are made to cut down on wasteful spendings.

Concerned revenue generating agencies present at the interactive session include: National Agency for Science and Engineering Infrastructure, the Federal Inland Revenue Service (FIRS), National Steel Raw Materials Exploration Agency, Nigerian Postal Service, Lagos University Teaching Hospital, and Nigeria Customs Service.

Also were the Nigeria Immigration Service, Nigeria Security and Civil Defence Corps, Nigeria Prisons Service, Maritime Academy of Nigeria, National Agency for Food and Drug Administration and Control (NAFDAC), and Abuja Geographic Information Systems (AGIS).

Others were the Federal Capital Territory Administration, Energy Commission of Nigerians, Administrative Staff College of Nigeria, Nigerian Export Import Bank (NEXIM), Nigerian Ports Authority and the Nigerian College of Aviation Technology, Zaria.

At the meeting between the Senate Leadership and Members of the Committee on Finance and the Revenue Generating Agencies of the Government, the Senate President, in his speech, said the purpose of the meeting was to explore means of increasing government revenues.

Ahmad maintained that to achieve the targets, the National Assembly, particularly the Senate, would become very strict in the demands on MDAs to generate more revenues.

This is just as he emphasised that such upscale in revenue generation was  a necessity to reduce the Country’s budget deficit and resort to borrowings, as well as prevent wasteful expenditures by agencies of government.

Ahmad, who said the upper chamber would provide support through legislation to ensure that revenue agencies perform to meet and surpass their targets, said, “In 2022, the National Assembly assumed and rightly so, that our government owned enterprises can generate up to N3 trillion if we are of the mindset that we can achieve that and, of course, ensure that we oversight to stall any possibility of unwarranted expenditures by agencies of government.

“But that does not mean in any way that it is going to be some kind of investigation on what you do, but an encouragement of what you need to do.

“In this meeting and subsequent ones, there should be no holds barred on discussions.

“Where an agency feels it is encumbered in any way from achieving its target, it should say so, so that we are able to prescribe the right solutions for it to perform.

“As a National Assembly, let me say that the Senate particularly will be stiff on generating more and more revenue.

“We will be rigid, we will continue to insist, because we believe that this is one sure and guaranteed way of reducing our deficit and borrowing.”

Lawan maintained that the drive by the upper chamber for more revenue to the coffers of government, would enhance the economy and facilitate infrastructural development.

“This Committee is modified, because the leaders of the Senate believe that we can do far better and we have seen signs when last year some of the agencies performed beyond expectation.

“So, it is an opportunity for us to save and enhance our economy and, of course, make Nigeria achieve more infrastructural development which is the goal of this administration and every Nigerian.

“We believe that when you (revenue agencies) generate the money, we (National Assembly) appropriate it.

“Prudence is of essence here, when we spend our money. And when we borrow, like the National Assembly has always tried to do, we borrow to treat specific projects and programmes of government,” the Senate President said.

On his part, Chairman of the Committee on Finance, Senator Solomon Olamilekan Adeola, lamented that there are insufficient funds for the implementation of policies and projects captured in the 2022 budget of the Federal Government.

He explained that funds are derived partly from the revenue generated by the government owned enterprises and other independent revenues sources of the Federal Government.

“There is an urgent need for all hands to be on deck on revenue generation for government, as well as prevent misuse and leakages of such revenue for frivolous purposes not sanctioned by the laws of the National Assembly,” he submitted.

According to him, for government to reduce and eliminate deficit budgeting associated with the nation’s budget over the years, effort must be made to minimise borrowing to fund projects.

According to him, while revenue generating agencies are statutorily expected to remit 80 percent of whatever accrue to them as operational surplus into the coffers of the Federal Government, several of such agencies are culpable of flaunting the Fiscal Responsibility Act, by refusing to remit the correct revenue generated into the Federation’s Account.

“It is expected any agency that are partly funded by the Federal Government, such agencies are expected to pay 80 percent of whatever accrues to them as operational surplus into the coffers of the Government. To our greatest surprise, we found out that the number of agencies that comply with this relevant section of the law is a far cry from the number we have that is expected,” he said.

…Fiscal Responsibility Act confusing, impracticable – Comptroller General, Customs

Against the Senate’s position however,  revenue generating agencies identified about seven major issues of contentions, they believed would make the demands unrealistic, and as such should, according to them, be addressed.

On its part, the Nigeria Immigration Service lamented the outsourcing of its corporation’s to service providers, while the Nigeria Customs Service contended that some clauses in the Finance Act will affect revenue collection, and thus impracticable.

The Comptroller General, Nigeria Customs Service, Hameed Ali, argued that legal technicalities in the Act pose strains to its practicality.

“We have consulted the legal luminaries and the conclusion is that this Act is confusing, and if stakeholders decided to take leverage on this, they can decide to say we are not supposed to collect duties and levies,” the Customs boss argued.

In response to the points of disagreements, the Senate President directed the Senate Committee on Finance to work with the relevant MDAs “to look at the Finance Act where it is established beyond reasonable doubt that there is need for us to amend.”

“We will do so expeditiously, probably that would be the fastest amendments we have to make so as to kick off,” he said.

He further directed the Committee on Finace to engage within the Agencies individually to understand challenges in meeting revenue targets.