The Federal Account Allocation Committee (FAAC) may turn its focus to the Nigeria Customs Service (NCS) and Federal Inland Revenue Service (FIRS) over the poor remittances by the revenue generating agencies.
Chairman, Forum of Finance Commissioners, Mahmood Yinusa, disclosed this in an interview with the Daily Trust.
“If you look at the FAAC report, there was a sharp drop in FIRS’ May and June collections, but there was no opportunity for us to actually engage the FIRS for them to explain to us why there was a sharp drop. I can’t remember vividly but the drop was about N90 billion. So FIRS also needs to tell us why the sharp drop.”
Yunusa also stated that the committee was advocating for reforms in respect of fees collected by the NNPC.
“Part of the process of strengthening the system will be to take the collection and remittance of royalty from NNPC to the Department of Petroleum Resources, DPR, while the collection and remittance of PPT will also be returned to the FIRS in line with the law.”
The committee had recently taken on the Nigerian National Petroleum Corporation (NNPC) over poor remittances, a charge the corporation has denied.
As a way out of resolving the deadlocked meetings, Yunusa also stated that a joint session involving the Governors’ Forum, Ministry of Finance, top management of the NNPC and Forum of Finance Commissioners has been planned.
Why the angst?
A large proportion of the states in the country are dependent on federal allocations. Delayed allocations mean they would be unable to pay wages and salaries. This, in turn, leads to economic activities grinding to a halt.
The monthly FAAC meetings have been postponed for the third consecutive time this year, due to the low receipts.
FAAC is a joint committee consisting of representatives of the Federal, State and Local governments. The committee meets monthly during which revenues are shared.
Sources of income for FAAC include oil revenue and taxes, customs and excise taxes, company income taxes (CIT), any sale of national assets, and surpluses from state-owned enterprises.
The Federal Inland Revenue Service (FIRS) started as part of a colonial tax organisation under the name Inland Revenue Department of Anglophone West Africa. The department’s scope of administration covered Nigeria, Ghana, Sierra Leone and the Gambia. In 1943, the Nigerian Inland Revenue Department was carved out of the Inland Revenue Department of Anglophone West Africa and established as an autonomous body under the supervision of the Commissioner of Income Tax.