Startling
revelations of illegal spending by Ministries, Department and Agencies, MDAs,
of tax deductions from contract payments and other deals may have stalled
government’s planned closure of the bank accounts of revenue collection
agencies.
Investigations
by National Mirror confirmed that the Federal Ministry of Finance could not
carry out its earlier threat to close some agencies’ bank accounts following
discoveries that some MDAs were found to have dipped their hands into fund
accruing from deductions from contract payments.
The law
requires that the money should be paid to the accounts of the revenue
collection agencies for onward remittance to the Consolidated Revenue Fund,
CRF.
The key
collection agencies are the Federal Inland Revenue Service, FIRS, and the
Nigeria Customs Service apart from scores of others that have come under the
scrutiny of the finance ministry.
A
source familiar with the situation confirmed that the finding that some MDAs
were using some of the deductions, including Withholding Tax deductions, to run
their entities has angered the Minister of Finance and Coordinating Minister
for the Economy, Dr. Ngozi Okonjo-Iweala, who has directed an investigation
into such deductions in the MDAs with a view to determining the total amount
due for remittance by the revenue collection agencies to the fund.
“What
has been discovered is that some MDAs even failed to pay what was deducted from
payment to contractors like the WHT to the accounts of the revenue agencies.
“Rather,
some of them claimed they were constrained to use such deductions to meet
urgent financial obligations.
“This
is contrary to financial rules of the public service but I don’t know what
could happen to the affected agencies. This abuse of due process has
constrained the ministry (finance) from going on with the planned closure of
revenue agencies’ bank accounts as earlier planned. This is not to say there is
any fraud, it is a form of misappropriation,” the source confirmed.
An
official in one of the revenue agencies, who did not want his name mentioned,
told National Mirror that none of her agency’s bank accounts was closed as at
the weekend, adding that “there is no way we can collect revenue without remitting
to the banks under the current regime when every payment is being monitored at
different stages of our collection processes electronically.”
It was
also gathered that rather than pay the spent monies to the revenue collection
agencies’ accounts when they receive monthly allocations, some of the
chieftains of the MDAs plead for more time on the pretext that what they
collected monthly was hardly enough to meet their financial obligations.
Some
were said to hold on to such WHT or other deductions for up to three months,
making it practically impossible for revenue generating agencies to remit such
payments as and when due.
It will
be recalled that the Federal Government had about six weeks ago threatened to
sanction some revenue agencies generating independent funds to the CRF for
failure to remit their collections after several attempts to make them comply
had failed.
In
order to compel the affected agencies to comply with the existing rules on such
remittances, government had set a deadline of Monday, June 17 for their
sanctions which may affect their collaborator banks after which they may be
prosecuted.
Okonjo-Iweala,
had in a statement she signed personally, said such a flagrant disregard of
existing revenue collection laws and rules was a conspiracy against national
interest which would no longer be condoned.
Specifically,
she disclosed that about N58bn which should have been remitted to the CRF are
still trapped in the revenue agencies’ accounts in some banks even as several
attempts by the government to secure the remittance into the Federal Government
coffers were rebuffed by the agencies.
Okonjo-Iweala
said: “It has come to the attention of the Federal Ministry of Finance that
some Federal Government’s agencies that generate independent revenue, in
collusion with some banks, have refused to remit monies to the Consolidated
Revenue Fund, CRF, of the Federal Government which they are obliged by law to
do.
“We
have identified about N58bn of such monies which rightfully belongs in the CRF.
“This
unwholesome practice has persisted despite the efforts of the Office of the
Accountant- General of the Federation, OAGF, to encourage the agencies and the
affected banks to do the right thing.
“Rather
than comply, the agencies and banks, through their lawyers, have engaged in all
manner of legal subterfuges to ensure that monies which are due to the Federal
Government are not remitted.”
She,
therefore, declared that effective Monday, June 17, 2013, the OAGF, in exercise
of its powers under the extant laws and rules, will close the accounts of
agencies involved in this practice in all banks.
The
minister noted that the process of systematic closure of the agencies’ accounts
in the banks would continue until all monies that should have been remitted
into the CRF were retrieved.
It will
also be recalled that the Director-General of the Budget Office, Dr. Bright
Okogu, had in a document entitled, ‘FGN 2013 budget: Fiscal consolidation with
inclusive growth,’ made available to the public in April identified
non-remittance of collections by the revenue agencies as one of the challenges
threatening the implementation of the 2013 budget.
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