FG, recover $205m unremitted funds
Oil companies’ recent failure to deposit $205.01 million into the Federation Account has prompted significant investigation. The Revenue Mobilization Allocation and Fiscal Commission and the Economic and Financial Crimes Commission reportedly worked together to make the discovery. The government should have zero tolerance for unremitted monies because public revenues are plummeting and debts are rising.
The Nigerian government’s fiscal policies frequently baffle the rest of the globe. With limited resources, significant deficits, rising expenses, and mounting debt, it exhibits puzzling inaction when it comes to collecting the vast sums of money owed to the Treasury; it does not stop revenue leaks or take steps to improve its poor tax system. Instead, it enjoys adding more burdens to those who are already overburdened, and on those who are weak.
The most recent finding by the RMAFC is typical of this self-subversion. The agency said that with the EFCC’s assistance, it has recovered over N192 billion from banks, corporations, and revenue-generating organizations, including N74 billion between 2008 and 2015 and N118 billion between 2016 and 2019.
The RMAFC and the EFCC, who had discovered the withheld cash, had asked some oil and gas corporations to remit the $205.01 million to government coffers; however, they refused. After being discovered, the offenders brazenly filed lawsuits rather than promptly remitting the monies, asserting that the two agencies lacked legal authority to demand the withheld funds.
Despite being shocking, this is not the first time that organizations mandated by law to remit funds to the Federation Account have refused to do so. Curiously, the government has always turned a blind eye. After the RMAFC brought this to their attention, the appropriate government agencies in this case ought to have moved quickly to reclaim the unpaid amounts. Instead, the government is borrowing to cover debt payments and employee salaries!
For instance, despite a Supreme Court decision requiring six international oil companies to pay up in October 2018, the Federal Government has not taken any significant action to retrieve the $62 billion owed to them. The court ordered the government to act right away to recoup all funds lost to oil exploration and taking advantage of businesses due to the incorrect profit-sharing formula being used since August 2003.
The Senate Committee on Finance disclosed in May 2021 that 60 government-owned businesses had violated the terms of the 1999 Constitution and the Fiscal Responsibility Act by failing to remit a total of N3 trillion over a six-year period.
Key revenue-generating agencies’ persistent failure to remit funds appropriately. It should be regarded as a crime because it is one. Like his predecessors, the President, Major General Muhammadu Buhari (ret. ), has been mocking the dishonest behavior. The National Assembly’s repeated inquiries, grievances, and threats throughout the years have also proven ineffective. The Nigerian National Petroleum Company Limited, the biggest defaulter, blatantly declared that it made no payments to the Federation Account in the seven months leading up to July 2022. Month after month, It sent the government a bill for N448.78 billion for the infamously evasive gasoline subsidy.
As of June, the entire external debt stock was $40.06 billion (N16.61 trillion), virtually exactly matching the $39.96 billion amount from March.
In June, the overall public debt-to-GDP ratio was 23.06 percent, down from 23.27 percent in March, and it is still below Nigeria’s self-imposed ceiling of 40%. According to the IMF, the ratio of debt service to revenue will be 76% in 2021 and 92% in 2022. This cannot continue.
In contravention of the constitution and the FRA, agencies have long relied on ministerial circulars to shortchange the government by misusing the idea of preserving a portion of their operating surpluses. They prosper as a result of the government’s disregard and collaboration.
Buhari ought to take action to stop both the official(s) who are doing it and the habit. The Independent Corrupt Practices and Other Related Offences Commission and the EFCC should intensify their efforts to stop corrupt organizations and individuals.
The government should put in place measures that will prevent any organization from using monies intended for the entire commonwealth however it pleases. Although a program like the Treasury Single Account is admirable, all the gaps that allow some organizations to go around it must be closed plugged.
Members of the NASS should uphold their duty of oversight and hold the executive accountable by ensuring that offenders must pay the price. The NASS should never again approve fresh budgets for MDAs that fail to remit due funds or submit their audited accounts as required by law, in place of making repeated warnings that they never heed.
Due to the NNPC’s failure to fund the Federation Account, the three tiers of government’s statutory joint account has not been funded at all this year. Due to the continuing reduction in funding for the central and subnational governments, this has made the public income situation worse. In the first quarter of this year, the NNPC deductions from the Federation Account increased by 40.5% to N883.56 billion and the business expected to subtract an additional N328 billion in April.
Government should take itself more seriously. It is not up to anyone to decide whether or not to pay money into the treasury or collect all owed taxes. They are unassailable legal obligations imposed by the nation’s highest legislation, as well as by enabling ordinances and rules. MDAs are obligated to remit, and the government is required to use all administrative, financial, and coercive measures to do so. Buhari needs to take decisive action right now rather than leave this mess exactly as he found it.
Credit: The Punch