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The Revenue Mobilisation Allocation And Fiscal Commission (RMAFC) has berated the Nigerian National Petroleum Company Limited (NNPCL) for its failure to remit statutory revenue to the Federation Account in line with the provisions of the Petroleum Industry Act (PIA), 2021.
The RMAFC said in a statement signed by its Chairman, Mohammed Bello Shehu, that the NNPC failed to remit revenue meant for the Federation Account between January and June this year.
He disclosed this as part of the financial report of accruals into the Federation Account for the first half of the year in which he revealed that over 5 trillion naira entered the Account for the period out of which the federal, state and local governments shared over 3 trillion naira.
The RMAFC boss added that the NNPCL did not remit any amount into the Federation Account during the period either as profit revenue or other revenues as contained in the PIA, 2021 “as its revenue performance could not be assessed because neither its revenue target was disclosed nor its revenue remittance to the Federation Account was provided.”
The NNPCL Group Managing Director (GMD), Mele Kyari, had however been quoted to have said the fuel subsidy payments it made on behalf of the federal government was responsible for its failure to remit revenue to the Federation Account.
The RMAFC boss in Wednesday’s statement also described the statutory deductions which constituted 32.27% of the total gross inflow into the Federation Account in the six month period “as superfluous and constitutes a drain on the Federation Account.”
Mr. Shehu also disclosed that the sum of N1,692,591,243,111.06 (One trillion six hundred and ninety two billion five hundred and ninety one million two hundred and forty three thousand one hundred and eleven Naira six Kobo) was deducted at source by the OAGF as approved statutory deductions; with a further deduction of the sum of N70,000,000,000 (Seventy billion Naira) by the Federal Inland Revenue Service (FIRS) under the name of FIRS Priority Projects in the second quarter.
The Chairman observed that the Nigerian economy at the moment requires some pragmatic measures to enhance distributable revenues for the three tiers of government for the overall development and growth of the country.
The Commission therefore made recommendations on the operations and management of the Federation Account with particular reference to: “Payment of cost of collection to Revenue Generating Agencies (RGAs) which should be tied to revenue performance where each RGA should receive cost of collection commensurate to the revenue generated against its revenue target in the Appropriation Act; the need for the government to review the payment of 100% (less cost of collection) revenue realised from gas flared penalty to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) as Gas flared penalty was hitherto a Federation Account revenue component taken over by the PIA, 2021.”
Other recommendations made by the Commission include:
“The need to review, holistically, all legislations with respect to statutory deductions to allow for increase in the amount to be shared among the three tiers of government; Greater emphasis on the Solid Minerals sector to improve revenue generation therefrom and further achieve economic diversification;
“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 chunk of funds were deducted as first line charge under similar name, i.e. ‘NNPC priority projects’; and
All accruals due on 13% Derivation should be deducted as at when due to avoid refunds in future.
“This is to guarantee accountability, probity and transparency in the management of the Federation Accounts and disbursements to the 3-tiers of government.
“The Commission also recommend 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; and NNPCL should be made to remit promptly all revenues due to the Federation Account as at when due in compliance with the provisions of the PIA, 2021.”
“The Chairman reiterated the commitment of the Revenue Mobilisation Allocation and Fiscal Commission in ensuring the elimination of opacity in the management of the country’s Commonwealth and promoting prudence, transparency and accountability in line with the new administration’s Renewed Hope Agenda which promises a new era for economic growth and development,” the statement concluded.
