The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has refuted claims that the absence of 30 Commissioners was grounding the activities of the Commission.
The Acting Chairman of the Commission, Shettima Umar Abba Gana made this refutation in a chat with press men Monday in Abuja.
Abba Gana pointed out that since most of the said Commissioners vacated office in November 2015 following the expiration of their respective tenures, their departure has never affected the work of the Commission even as the few members that remained on board have continued to discharge their responsibilities without let or hindrance.
He explained that the Act establishing the Commission explicitly stated that only 5 numbers of Commissioners constitute a quorum and that the 7 remaining members from the different parts of the geo-political Zones were sufficient to discharge the routine and specific duties related to the statutory mandate of the Commission.
He however added that it was desirable to have all the Commissioners in place.
For instance, the Acting Chairman recalled that RMAFC had successfully carried out verification and reconciliation of collections by Banks where recoveries totaling over N73 billion were made, while similar exercises on Stamp duty collections and Tax liabilities of the three tiers of government on With Holding Tax (WHT) and VAT yielded N27 Billion and N168 billion respectively.
Furthermore, Abba Gana disclosed that the Commission as a Member of the Federation Account Allocation Committee and Chair of the Post Mortem Sub Committee has been effectively supervising the disbursement of the statutory monthly allocation including preparing attribution and indices for the 13% Derivation given to oil-producing States.
The Acting Chairman also recalled that RMAFC had in 2016 carried out a Nationwide Monitoring Exercise on revenue leakages in the solid minerals sector where potential revenue of 10 out of 50 commercially-viable mineral types of up to N5 trillion was established.
The Revenue Mobilization Allocation and Fiscal Commission ( RMAFC ) has commended the Federal Government on the approval given by President Muhammadu Buhari to the Nigerian National Petroleum Corporation ( NNPC ) to enable it undertake a review of all Production Sharing Contracts ( PSCs ) between it and its various partners to reflect the current realities in the industry.
In a press statement signed by Mr. Ibrahim Mohammed, RMAFC’s Spokesperson, the Commission recalled that it had earlier thrown its weight behind the proposed review of the PSCs approved by the Federal Executive Council ( FEC ) at its meeting held on Wednesday, 13th December, 2017.
The statement quoted the RMAFC Acting Chairman, Shettima Umar Abba Gana stressing that “the Commission viewed the move by the FG as a welcome development and commendable as the Commission, that has the constitutional responsibility of monitoring revenue accruals into and disbursement of revenue from the Federation Account had been consistently calling for the review of these contracts for the past seven (7) years adding that these contracts had not been reviewed nine (9) years after both conditions stipulated in the relevant provision of the Act have elapsed, thereby leading to the huge revenue loss of about $21 billion by the Country in the last 20 years”.
It would be recalled that the Minister of State for Petroleum, Dr. Ibe Kachikwu, recently announced that the government had approved steps to amend Section 17 of the Deep Offshore and Inland basin Production Sharing Contracts Act, 1999 which specifically provides that the 1993 PSCs should be reviewed once the price of crude oil exceeds $20 a barrel or fifteen (15) years after the contracts i.e. 2008. To this end, the Commission advised that Government should take appropriate steps to ensure the review of these agreements with due diligence.
Read also:No new revenue formula, no new minimum wages, says RMAFC
Similarly, RMAFC recalls that in April, 2016, it drew the attention of Government to the fact that three (3) main contract types namely Joint Venture, Production Sharing and Service Contracts were in use in the Nigerian Oil and Gas Industry. Having carefully examined the fiscal terms of each contract and the associated revenue inflow into the Federation Account therefrom, the Commission lamented that the PSCs as represented by the 1993 PSC’s which should have been renegotiated as far back as 2008 has yet to be done, thus causing the Federation Revenue losses due to the unfavourable terms of the contracts.
RMAFC further advised the Federal Government to restore production in Joint Venture Contract to previous level of approximately 108 million barrel per day and also requested OPEC to increase Nigeria’s quota because of the country’s population.
“It should be noted that the JVC makes the highest contribution to the Federation Account compared to other revenue streams,” the statement said.
Staff of the Revenue Mobilization, Allocation and Fiscal Commission ( RMAFC ), have warned that the proposed new minimum wage may not materialize if the revenue formula is not addressed first.
In the early hours of Wednesday in Abuja staff of the RMAFC picketed the commission over poor funding and remuneration.
According to the Chairman of the Nigerian Civil Service Union ( NCSU ), unit of RMAFC, Comrade Josiah Amanabo, who addressed journalists in Abuja said “there is a clamour from states to review the revenue formula. The Minister of Labour and Employment, Sen. Chris Ngige, wants to hide under the guise that the revenue allocation formula is not ready, to delay the new minimum wage.
“If there is no revenue allocation formula, there cannot be new minimum wage in September. RMAFC is the commission to carry out the revenue formula review. We don’t even have the funds to do this assignment.
“Nigerians might be thinking that the commission is not competent to carry out these functions, not knowing that it is a result of paucity of funds.
“This is an urgent call to the President; if truly his government wants the commission to carry out its function within a short period of time, then, the provision of adequate funding is imperative.”
“The RMAFC is not an appendage to the ministry of finance, but an independent and autonomous body; for that singular reason, it is expected of us to do our job. We have chartered accountants and other professionals from every field of endeavour in this institution, why giving our job to consultants to do?
According to him, “we are being frustrated in the dispensing of our jobs due to poor funding and sometimes no funding at all.”
Workers, Unions protesting in RMAFC office, AbujaEmpty office of the RMAFC during the protest/shut down
The protest and total shut down of the commission he said is a cry for the nation to see that the change mantra of the President Muhammadu Buhari led administration comes to fruition and that corruption is nipped in the bud.
According to him, “consultancy has taken away our jobs. Also, the board has not been constituted. The union complained about how dilapidated its building is due to paucity of funds to carry out maintenance.”
He lamented that the Ministry of Finance, was starving the institution of necessary funding, and has indirectly taken over the statutory responsibility of the institution, which is to monitor the accruals to and disbursement of revenue from the federation and to review from time to time the revenue formulae and principles in operation to ensure conformity with changing realities.
According to him, “how can you monitor people who are more than you financially?; poor funding is at the heart of our cry. How can you monitor agencies such as DPR, FIRS, Customs, NNPC etc., who enjoy percentages and cost of collection every month of release? What we want is cost of monitoring. How can I dress in a tattered way to monitor people whose suits are finer? I need a dress code to do my job,” he said.
Also, the chairman of the Association of Senior Civil Servants of Nigeria ( ASCSN ), unit of RMAFC, Mr. Martins Adeoye said: “Every revenue that goes into the federation account for distribution is shared by the three tiers of government.
“However, it is only the federal government that is funding the commission through its budgetary provision. How about funding from states and local governments? They are also beneficiaries of the federation accounts.
“We believe that they (states and LGs) should also assist the federal government in funding the commission. In so doing, we will have enough funds to carry out our operations.”
He also explained that the lacuna in funding is what the workers unions aim to address by picketing and protesting.
Commenting on the cry of the staff to get substantive Chairman and Secretary of the commission, Mr. Martins said: “for our operations here, every state of the federation including the FCT is being represented by a commissioner and a chairman. There ideally should be 37 commissioners and a chairman. Over the last two years, the number of commissioners have dropped from 37 to about six (6) as we speak. How do you expect six commissioners to carry out the functions and activities of 37 states?”
“The commission has an acting chairman after the tenure of the former chairman elapsed in 2015. We need a substantive chairman to take charge of the activities of the commission. We also want more commissioners to be appointed in the board,” he said.
Also, Dr Rosetta Adiotomre, secretary ASCSN, said: “we are also calling on the state governors to expedite action to fund us because the ministry of finance is starving us of funds. We do not only work for the FG, but also for states and LGs.
“We need the states to wake up to their responsibilities and fund the commission.”
The overall demonstration and protest by the staff of RMAFC was peaceful; even the police unit deployed to the premises acceded to the fact that it was a peaceful demonstration.
The workers and its union representatives later matched to the office of the Secretary to the Government of the Federation to table its demands in a document.
The workers, in the document to the SGF declared their intents and implored the SGF to address issues of poor funding, constitution of the Board of the commission, filling of the vacant office of the Chairman and Secretary to the commission, appointment of more commissioners amongst others.
The letter was signed by the Chairmen of the Nigerian Civil Service Union (NCSU) and Association of Senior Civil Servants of Nigeria (ASCSN) – Comrade Josiah Amanabo and Comrade Martins Adeoye respectively.
The protest which is slated for two days (today and tomorrow) maybe called off once their demands are met.
When contacted, the Public Relations Officer of the RMAFC, Mr. Ibrahim Muhammed, in responding to the protest in the commission said he had “no comment” to make regarding the protest and demands of the staff of the RMAFC.
The refusal to grant the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) audience to submit the new revenue Allocation formula report by the Goodluck Jonathan administration is said to be the reason the new revenue allocation formula has not been passed.
However, the RMAFC is insisting that the revenue Allocation formula in existence now is still legal.
A statement from the Commission signed by Ibrahim Mohammed, Head, Public Relations said “the Commission prepared another revenue Allocation Formula Report in December 2013 which was duly communicated to former President Dr. Goodluck Jonathan in January, 2014.
However, the Commission was not granted audience to submit its recommendations to President Jonathan up to the end of his tenure in May, 2015. The current administration has also been informed of this development.”
This reaction “followed recent media reports where it was alleged that the current revenue allocation formula is illegal on the grounds that it was never submitted to the National Assembly by Mr. President” Ibrahim Mohammed said.
To put the records straight Mr. Ibrahim Mohammed, RMAFC’s spokesperson recalled that the first Revenue Allocation Formula duly passed by the National Assembly was in 1982 during the Second Republic of former President Shehu Shagari. After the military take-over, the Act was amended by Decree No 106 of 1992 which continued to operate up to 1999.
According to him, “It is instructive to note that with the return of democratic rule in 1999, all laws were considered as existing laws as provided for by Section 313 of the 1999 Constitution and therefore Acts of National Assembly which apply to the extent that they conform to the provisions of the Constitution.”
He also added that “following the Supreme Court ruling in AGF vs Abia and 36 others which voided some of the provisions of CAP 16 as (amended), Mr. President as the relevant authority invoked his power under the provision of section 315 Sub Sections 1 and 4 to issue the Modification Order to bring the voided provisions into conformity with the provisions of the 1999 constitution.”
Consequently, Ibrahim Mohammed noted that “the President and the Governors met and resolved some grey areas in the provision of the Modification Order, hence the implementation directives released by the Minister of Finance on 15th January, 2004 which is the formula currently in operation.”
Furthermore, the Commission had in August, 2001 reviewed the Revenue Allocation Formula and submitted its Report and recommendations to President Olusegun Obasanjo.
He also stated that the advice and recommendations were promptly forwarded to the 4th National Assembly for deliberations. “However, the Commission had cause to withdraw its recommendations to make some necessary adjustments because the Supreme Court Judgment of 5th April, 2002 had actually affected some of the recommendations as proposed by the Commission in its 2001 Report.”
After the review, the Report was subsequently re-submitted to President Obasanjo in December, 2002 which was also forwarded to the 4th National Assembly.
Unfortunately, the 4th National assembly could not conclude deliberations on the matter up to the end of the first tenure of President Obasanjo in May, 2003. Again, the 5th National Assembly could not conclude deliberations on that sensitive matter up to the end of the Obasanjo administration in May, 2007.
When the 6th National Assembly came, the Commission was informed that all bills including that of the Revenue Allocation Formula not passed by the 5th National Assembly have elapsed and therefore, should be re-submitted.
…RMAFC designing new sources of revenue for states and LGs
The federal government has warned state and local governments that further financial support to them will be based on how well they implement the 22 Action points of the Fiscal Sustainability Plan (FSP).
Vice President Yemi Osinbajo made this declaration Monday in Abuja at a workshop organized by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) on alternative sources of revenue generation for sustainable development in states and local government councils in Nigeria.
Represented by the finance minister Kemi Adeosun, Osinbajo noted that “independent monitoring and evaluation of states against agreed milestones under the FSP, has been conducted and further consideration for support to states, will be solely dependent on reports from this exercise.”
The Vice President stated that “fiscal discipline, improved revenue generation, rational allocation and efficient use of resources, must be strategies adhered to by every tier of government if we must return to a path of sustainable growth.”
The 22-Point FSP for states and local governments he said “was introduced and acceded to by states governments in 2016 with the view to enhancing fiscal prudence and transparency in public expenditure, monitoring the ongoing public financial management reforms being undertaken by the federal government.”
Osinbajo added that the strategic objective 2 of the FSP was focused on improving public revenues, requiring each state to set realistic and achievable targets for improving Internally Generated Revenue (IGR) from all revenue generating activities of the state in addition to tax collection.”
The idea he said; “was for each state government to look inwards and come up with a plan that was best suited for their states based on available resources.”
Other action points for the state governments include privatization of state owned enterprises, establishment of efficiency units to reduce overhead expenditures, biometric capture of all civil servants, implementation of continuous audit to reduce revenue leakages and measures to achieve sustainable debt management.
Earlier in his address, the Acting Chairman of the RMAFC, Alhaji Shettima Umar Abba-Gana, said the commission was designing new additional sources of revenue and ways and means of generating and collecting these revenues for the benefit of the states and local governments.
He lamented that the challenges of a troubled economy, occasioned by drastic fall in the international price of crude oil, the fall in the level of oil production security challenges and General drop in national productivity negatively affected the inflow of funds into the Federation Account.
Abba-Gana expressed optimism that in due course, the over dependence on statutory transfers of funds from the Federation Account for governance by the states and local governments will begin to reduce.
…Says revenue generating agencies spending over 90% of N1.5 trillion yearly
The National Economic Council (NEC) meeting chaired by Vice President Yemi Osinbajo on Thursday approved steps to stop financial abuses by some revenue generating agencies.
They were alleged to be paying salaries and allowances above Revenue Mobilization Allocation and Fiscal Commission (RMAFC) specifications, converting official cars to personal ownership, monitising medical allowances arbitrarily, unapproved oversees travels, lavished training allowances, excessive personal loan approval including unapproved mortgages.
The Ministry of Finance was also said to have informed the Council that the revenue agencies raise as much as N1.5 trillion yearly and spend almost 90 percent on their recurrent expenditure.
Anambra State Governor, Willy Obiano spoke with State House correspondents at the end of NEC meeting.
He was with Bauchi State Governor, Mohammed Abubakar and Minister of State for Petroleum Resources, Ibe Kachikwu.
He said: “The long term financial abuse by some revenue generating agencies was taken at the council. The finance ministry reported to the council certain activities of some revenue generating agencies that amounted to financial abuse of the revenue they generate.
“The minister added that this has been going on for a decade but such financial abuses whereby the agencies hide the revenues that ought to go to the federation accounts will now be exposed and terminated,” he said.
He also disclosed that the report on the Excess Crude Account presented by the Minister of Finance, as at November 2016 showed the balance $ 2.4 billion.
According to him, the minister also disclosed that the sum of N1.1 billion was disbursed in the month of October to 35 states and a total of N6.3 billion has been disbursed to 35 states.
On Ecological fund, he said that N2 billion was said to have been paid to the states by the last administration but that some states did complain that they did not have equal share of the money or even got anything at all.
He said that the reason why it happened will be investigated and report made available to the President.
Bauchi state governor, said that Council received a presentation from the Ministry of Industry, Trade and Investment and relevant agencies on moves to energizing the MSMEs sector as a major Economic Growth Drive.
“The Ministry informed the Council that the total estimated number of MSMEs is 37,067,416 MSMEs in Nigeria, and their contributions to employment is 84.02%, 48.47% to GDP, and 7.27% to export.
“Of the total number, micro enterprises account for the majority, (99.8%) of the MSMEs in Nigeria, with 36,994,578 enterprises, 68,168 small enterprises, and 4,670 medium enterprises.”
He said that the presentation showed Lagos State has the highest number of Micro Enterprises – (3,224,324); followed by Oyo and Kano States (1,864,054 and 1,794,358 respectively), while Nasarawa State has the least (226).
According to him, the CBN has a fund in excess of N200B meant to provide affordable loans to MSMEs.
He said that the bank has helped about 120, 290 small holder farmers under the Anchor Borrowers Programme in three states, creating more than 500,000 jobs.
The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) have advised Yobe State Government to establish selling points for solid minerals exploited in the state as a way of boosting the Internally Generated Revenue of the State.
The National Commissioner Barr. Yakubu Muri Tukur gave the advice during a courtesy call on Governor Ibrahim Gaidam at the Government House in Damaturu said the state can only get revenue of its royalties from the solid minerals only if it establishes selling points of such minerals or else it will lose it to states where those minerals are being sold.
Tukur also told Gaidam that his team was in the state to monitor royalties accruable to the state and equally scrutinises the activities of illegal miners.
In his response, Governor Alhaji Ibrahim Gaidam called on the Federal Government to urgently review of the legal frame-work surrounding the mining sector to clearly define the roles of the states, local governments and communities blessed with solid mineral potentials.
Gaidam also advised the Federal Government to accelerate exploration and exploitation of the solid minerals in Yobe to enable it benefit from the 13% derivation accruable from the revenue from solid minerals in the state.
“The Federal Government should take decisive steps towards accelerated exploration and exploitation of Solid minerals that abound in the country and in particular states like our own. This will enable us benefit from the 13% derivation accruable from the revenue from solid minerals that we have been blessed with,” Gaidam said.
The Governor praised the foresight of the Revenue Mobilization Allocation and Fiscal Commission for conceiving the idea of monitoring royalties’ collections and activities of miners at the state and local government levels said it will help in enhancing the revenue based of the solid mineral producing states in the country.
He added that as part of the effort to encourage investors in the mining sector in the state, his Government has formulated policies aimed at creating confidence through construction of infrastructural facilities for better result.
The Governor directed the secretary to the state Government to come up with a proposal for the establishment of a domesticated state mineral resources and Environmental Management Committee for effective the implementation of all important decisions in the sector.
The Nation checks revealed that Yobe State has a very robust solid mineral base ranging from Limestone, Gypsum, Trona, Kaolin, Clay, Diatomite, Iron Ore, and Silica Sand among others.
Lagos State Governor, Mr. Akinwunmi Ambode on Wednesday said that the commencement of crude oil production in the State would in no small measure, enhance the economy of not just the State but the nation in general.
The Governor, who spoke when he received the Chairman and members of the Indices and Disbursement Committee of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) on a courtesy visit to the Lagos House, Ikeja, said that it was significant for the Nigerian economy that the State has emerged as the first oil producing state outside the Niger Delta basin.
He described the visit by the committee as remarkable in the annals of the history of Lagos, adding that it signals the official step that takes the State to the final destination that makes us to become an oil producing state.
“We are very glad to receive this delegation. We also want to thank the Federal Government, most especially President Muhammadu Buhari for making this happen very promptly. I want to say that this has been the quickest action that has been taken by RMAFC since I have known the Commission.
“I used to be a former Account General so I had a lot of transactions and relationship with the institution called RMAFC. Within a span of about 60 days of when we wrote our letter, and even before we wrote the letter, this technical committee was set up. It gladdens me to say that the institution works and is working for the good of Nigeria,” the Governor said.
Governor Ambode also commended the members of the Department of Petroleum Resources (DPR) and the Boundary Commission, saying that both have contributed immensely to the process of the discovery and production of crude oil in Lagos.
While alluding to the fact that the feat in Lagos has kick-started the path to diversification of oil production in Nigeria, the Governor urged other states in the federation to begin to activate the mineral deposits in their domain as a means to boost their Internally Generated Revenue (IGR).
“It would also give us revenue independence in a manner that there would be equal growth from all the nooks and corners of Nigeria. I am happy that RMAFC has taken this step and also to say that they should also encourage other states to engage in such activities that would allow them to be able to activate whatever mineral deposit that we have in the various states in conjunction with the Federal Government, so that we can start to diversify revenue and growth and then create a balanced growth and development for the whole country,” Ambode said.
Earlier, Chairman of the Committee, Alhaji Aliyu Mohammed said they were on a working visit to Lagos to verify crude oil and gas production from Aje Oil Wells for the purpose of disbursement of the 13 per cent Derivation Fund to the State in line with the constitution of the Federal Republic of Nigeria.
He said the Commission had set-up an Inter-Agency technical Committee comprising of the RMAFC, DPR, Office of the Surveyor General of the Federation and the National Boundary Commission to determine the location of the Aje Oil Wells.
Mohammed said that the Technical Committee recommended that for the purpose of the Derivation Fund as spelt out under Section 162 (2) of the 1999 constitution as well as the provision of the Allocation of Revenue Act 2004, number 1, 2, 4 and 5 of the Aje Oil Wells fall within 200m isobaths and therefore should be attributed to Lagos State.
He said as a result, the Commission and members of the Inter-Agency Committee had to embark on the working visit to the Oil Wells to conclude the process.
He added that the outcome of the visit would promote national unity as well as the socio-economic development of Lagos State and Nigeria.
“It is also important to state that the commencement of oil production from Aje oil field by Yinka Folawiyo Petroleum Company Limited is the first time oil is being produced outside the Niger Delta basin and therefore of a significance in diversifying the source of crude and gas production in the country,” Mohammed said.
The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has called on the federal government to review Value Added Tax (VAT) upward from five per cent to about 7.5 per cent in order to improve the country’s revenue base.
The Chairman, RMAFC, Mr Shettima Gana said this in Kano yesterday at a two-day National Revenue Retreat organized by the federal ministry of finance.
Gana said VAT was a high tax revenue yielding instrument that could be used to shore-up revenue required for financing the ever-expanding public expenditure needs of all tiers of government.
He then advocated for a comprehensive research to be initiated to collate data from the Corporate Affairs Commission, banks, state ministries of trade and so on, to determine and capture all possible VAT targets.
Gana advised Government to introduce additional taxes, such as toll tax for the road, luxury goods tax on mansions, exotic cars, private jets and jewelries. He also canvassed for inheritance tax to be introduced which will be paid by a person who inherits money or property from a person who has died. Gana also harped on the importance of developing the agriculture, mining and tourism sector, which holds the potential for huge revenue stream for the government.
He urged government to enhance collection efficiency, block leakages in revenue collection and beef up revenue monitoring and intelligence gathering. He said once all this is done, it would bring in more funds for government, expand the economy and create employment and ensure economic development.
Earlier, the minister of finance Mrs Kemi Adeosun assured Nigerians that the Federal Government’s drive for enhanced revenue generation would not be a burden to Nigerians but will ensure that all revenue due to the government, irrespective of the source, is collected with a high degree of efficiency, fully receipted and properly accounted for.
Adeosun, said the federal government has identified over 1000 dormant revenue lines, and assured Nigerians that such huge dormant revenue opportunities will be maximised.
She disclosed that the Federal Government has commenced the review and revision of the cost profiles of revenue generating agencies to ensure that maximum operating surpluses are declared and remitted in compliance with the Fiscal Responsibility Act. She said, “In this regard, we have recently commenced a number of audits of a range of agencies that will give us improved visibility into the revenue and cost profiles. This will enable us to generate an indicative cost profile that can be used to establish reasonable budget targets going forward.”
Adeosun said the days when revenue generating agencies acted as autonomous entities outside of the budget cannot be allowed to continue, saying whether the funds are from fees and fines, from taxes or from projects, the law is clear that every naira must be paid into the Consolidated Revenue Fund.
She added that the Ministry of Finance has committed itself “to a Total Revenue focus, which will reengineer revenue collection, explaining that the focus of the event will be around preparing for the enhanced government revenue opportunities that will arise as Nigeria begins to recover.”
