The Minister of Finance, Mrs. Kemi Adeosun, on Wednesday mulled the idea that new targets should be set for Chief Executive Officers (CEOs) of federal revenue agencies and that performance should be used as a criterion to guarantee their tenures.
The minister proposed this at the launch of the template for calculating operating surplus by Ministries, Departments and Agencies (MDAs) into the Consolidated Revenue Fund (CRF) held in Abuja.
Represented at the forum by the Secretary, Presidential Initiative on Continuous Audit (PICA), Mr Kyari Dikwa, the minister pointed out that that the call became necessary in view of the fact that for over 20 years, Nigeria had not met up to 50 per cent of the revenue target set for independent revenue.
“The question is why is that so? Before the budget is prepared, there are bilateral discussions between the MDAs and the Budget Office of the Federation (BOF), and some other agencies on what they should generate. But we realised that the targets are still not being met’’, she lamented.
This is even as Adeosun canvassed the review of the Fiscal Responsibility Act, (FRA) 2007, to provide for sanctions and incentives with a view of improving the nation’s revenue generation capacity.
She clarified further: “I also recommend that there is the need for cost of collection and it is in line with the constitution. “For every revenue generating agency, there is a cost of collection and you will realise that with this they will meet their targets.
“You can see that the Federal Inland Revenue Service (FIRS), Department of Petroleum Resources (DPR), Nigeria Customs Service (NCS), are meeting their targets because of such incentives on collection’’, the minister stressed.
Expatiating further, Adeosun pointed out that many MDAs were engaging in donations to political parties and charity organisations what should make up their operating surpluses in violation of their policy mandates and later come up to declare zero balance as surplus.
According to her, this anomaly, amongst other reasons, necessitated the development of the new template so MDAs could know what constituted their surpluses and what should be retained as general reserve funds for their agencies.
In his remarks at the event, the Acting Chairman, Fiscal Responsibility Commission (FRC), Mr Victor Muruako, said that the template was developed with inputs from the initial 31 corporations in the schedule of the Act and also in line with government’s fiscal efficiency policy of blocking loopholes endangering revenue collection.
He explained that the initiative was not designed to put the agencies in the schedule of the Act for the mere sake of raising revenue for government, but that it was justified by the fact that there is a designed empirical means of ensuring that agencies were not short changed.
Muruako clarified that operating surplus was the difference between the income and expenditure of a scheduled corporation/MDA as derived from its audited financial statements.
“Where the difference is positive, then it is surplus, but if it is negative it is a deficit. The FRA, 2007 in Sections 22 to 24 requires scheduled corporation/MDA to remit 80 per cent of their surplus into the Federal Government CRF and keep 20 per cent in general reserve fund’’, the fiscal expert said.
In addition, he disclosed that the commission was also working on a template for determining Medium Term Expenditure Framework (MTEF) to improved the efficiency of the fiscal system.
The Chief Economic Strategist, New Partnership for Africa’s Development (NEPAD), Prof. Ken Ife, who described the template as coming at a most auspicious time, advised that the FRC’s monitoring and evaluation framework should involve aspects for monitoring and compliance.
He harped on the need for government to improve the performance of the economy, including the tax regime, noting that if this is done people would be happy to pay their taxes because they could see dividends of their compliance.
