ll 845 Ministries, Departments and Agencies (MDA) of the Federal Government will from next year remit part of their internally generated revenue (IGR) to the Federal Governmental as “independent” revenue.
The House of Representatives has said it will expand the schedule of 31 agencies that remit independent revenue to include all ministries and other agencies that are not captured on the schedule of the Fiscal Responsibility Act (FRA), 2007 as a result of the financial challenges confronting the country.
The Chairman, House Committee on Finance, Abdlumumin Jibrin, told reporters at the weekend in Abuja that the House, on resumption from its two-month recess, would immediately take on the amendment of the FRA that would revolutionise revenue generation capacity of the MDAs.
According to him, the move became necessary as a result of the discovery that the 845 MDAs have the capacity to generate N2 trillion annually from their IGR to government coffers.
He said the Committee on Finance came to the conclusion based of the investigation of remittance of 60 agencies to the government that led to the recovery of N108b between December 2012 and May.
Jibrin said: “When you look at the IGR of the country, say 10 years back, that sub head always carries a total sum of about N300b to about N450b year after year as projections for that category.
“But at the end of every year, when you go back and look at the performance of that sub head, we never had more than five per cent performance. So even if the projection for a particular year is N100b, we have never had less more than N2.5b, and in most cases, much less than 5 per cent.
“On the other hand, the 80 per cent remittance of operating surplus was also evidently manipulated by these agencies that they are operating at a loss, which was why the Ministry of Finance came up with the 25 per cent of gross earnings to be remitted.
“The intervention of the Committee from December to May has earned the Federal government N108b from IGR of agencies as independent revenue solely for the Federal government.
“The logical question that should agitate the minds of Nigerians that have been deprived of gainful employment, basic public infrastructure and basic health care service is, where has this money been going to all these years.
“That is worrisome because we came to a conclusion that most of these agencies, if we harness their potentials to generate revenue internally, they can generate not less than N2tr in a year”.
The lawmaker regretted that the country is operating a huge budget deficit, whereas government agencies can on their own generate revenues to the tune of N2tf, which is more than the capital expenditure of the country but is being diverted elsewhere,
“With capacity to generate about N2tr yearly, which is more than the capital expenditure of the country, these agencies are doing a great disservice to this country because it is even those that take subventions from government that are manipulating the remittances.
“This is what prompted the revolutionary approach the Committee is taking with the amendment of the FRA on two fronts because we cannot afford to repeal and re-enact the entire Act in one fell swoop because of time factor.
“The amendments were to ensure that these agencies remit exactly what they are supposed to as well as strengthen them in their revenue generation operations.
“How we hope to address it by amending a clause in the Act to give the Fiscal Responsibility Commission (FRC) the power to arrest and prosecute any CEO that raises such reverence and refuses to remit in accordance with the provisions of the Act.
“In addition, the Commission is to be given the power to sanction, so that in cases where it is not outright refusal to remit but an infringement on the process, such agencies should be sanctioned.
“The Commission would have power to summon, look into their books and when necessary sanction such erring agency.
“Thirdly, we are adding a clause, at the end of every fiscal year, the Commission will publish all the agencies on the schedule, the total amount projected for them to raise and total amount raised or actual collection for all Nigerians to see.
“The Commission would make it mandatory, not as we have it now as a matter of choice, it will henceforth be mandatory”.
He also revealed that activities of other bodies that affect the job of the FRC and the revenue in question such as the Budget Office, Ministry of Finance, budget supervision among others, would also be affected.
He said: “We discovered that the power of the office of the Director General of Budget Office is too much, the DG is just like a god on his own, so we want to empower the FRC to be able to ask for the books of the Budget Office open it up for investigation to be sure that everything is being done in line with the provision of the FRA”.
Two major amendments according to him include one that would categorise all MDAs into four groups, based on their capacity to generate revenue and remit to government.
The second amendment would make it a law to ensure that no MDA is left out of remitting part of its IGR to government as currently practiced.
“The first is the provision that stipulates the 80 per cent remittance of operating surplus. We believe that provision is insufficient and has not given the desired result.
“What we are doing doing is to categorise agencies into four broad groups, those to remit 100 per cent of their gross earnings to government, those to pay 25 per cent.
“Category three would be those that will retain their operating surplus while the fourth group are classified as special because of the peculiarity of their operations.
“We are doing this because it was found out that the 25 per cent remittance of IGR as directed by the Ministry of Finance would require a legislation, coupled with the fact that its not all agencies that have the capacity to remit such while there are some agencies that should pay 100 percent of their gross earnings.
“We don’t want a situation whereby we will adopt just one of these categories and others will come up a very genuine argument why they should be exempted. To avoid that loophole of escape, we have to come up with suitable category for each MDA,” he added.
Jubrin explained that the second amendment would expand the Schedule of 31 agencies to include all MDAs, “Because in the course of our work we discovered that all 845 agencies of government are generating one form of IGR or the other.
“Of serious concern however is the fact that some of these agencies felt that there is no reason to remit what they term ‘paltry revenue’ to government. One CEO, during our investigation, said why should the Committee bother him to remit to governtment part of the N23m his agency generated internally.
“So the believe is that such amount does not matter, whereas even if it N1m, it must be properly accounted for.
“With the amendment, every MDA will now be captured, even if it is just N1,000.00 that was generated as IGR, what they should remit as provided by the law must be remitted, henceforth.