By Stephen Ubanna
When former President Olusegun Obasanjo in 1999, placed the Nigerian Customs Service, NCS And the Federal Inland Land Revenue Service, FIRS, on the Cost of Collection to receive money from government as to spur the revenue generating agencies generate more revenue for the government to run their agencies the Authorities may have seen as opportunity to force the Organisation to block areas of revenue leakage and in order to receive more from the government to run their Organisations.
The then Obasanjo’s Administration had approved 7% and 4%, percentage that was said to have been determined by the National Assembly of all non-oil, oil and gas revenue, collected by the two revenue generating agencies for their yearly Capital and recurrent expenditures instead of going cap in hand to he government to beg for money to procure their operational equipment and pay staff salaries as at when do.
Take for instance, the NCS was said to have received about N52 billion in 2011, N N60 billion in 2012, N58.3 in 2013, N68.3 in 2014 and N63.2 in 2015, as its seven percent of cost of revenue collections earnings. There indications that the service received over N2.1 trillion as cost of collections between 2012 and 2017.
The NCSand FIRS, Authorities may not have had any problem over the years in running the affair of their Organisation, particular, NCS, in purchasing operational vehicles and other equipment for their operations both at seaports and Land border areas and paying the officers and men of the service salaries and other Allowances as at when do.
The four percent, FIRS, annual costs of collection was said to have fetched it N185.14 billion in 2011, N200.31 billion in 2012, N192.22 billion, in 2013, and about N200 billion in in 2014 and N150 billion in 2015. Hameed Ali, a retired Army Colonel and Comptroller General, NCS, may have known that the service is making good money from its seven percent yearly cost of collection s from its total revenue generated from the government that he has given a matching order to the Areas of the various Customs Formations across the country to ensure that they block all areas of revenue to improve on its revenue collection s this 2022, Fiscal year, which was aid to have been set at N2.01 trillion.
Given his optimism that the service will meet the revenue target set for the service may have informed why it has projected a target of N2.8 trillion revenue collection for 2023, N3.5 trillion in 2024 and N3.75 trilion in 2023. His optimism, to achieve the revenue targets set between 2013 and 2015, was said to have been based on the fact that the service is working round the clock to start implementing the collection of the telecommunication tax in 2023, to further boost the nation’s revenue.
President Muhammadu Buhari had approved for the implementation of the 2022 Fiscal Policy Measures made up of Supplementary Protection Measures, SPM, for the implementation of the Economic Community of West African States, ECOWAS, which is an economic bloc, within the African Continent , Comon External Tariff, CET, 2022-26, and excise duties, on non- alcoholic beverages, alcoholic beverages , Cigarettes and products, as well as Telecommunications services, which was said to have come into force on April 1st, 2022.
Given the fact that the NCS and FIRS, , are reaping the benefits of their seven percent and four percent cost of collection respectively without going cap in hand begging the government for money to run their agencies may have informed why the Ahmad Lawan , led Senate is contemplating of extending to the 63 government owned Enterprises, GOEs, including the Central Bank of Nigeria, CBN, Nigerian National Petroleum Coorporation , NNPC, now baptized Nigerian Petroleum Company Limited, with the passage of the Petroleum Industry Bill, PIB, in June 2019, into Law by the Katsina state born Nigerian President, to fund their expenditures with immediate effect instead of awaiting for monthly allocations from the Federation Account.
. The Nigerian Senate, under the close watch of Lawan, may have been encouraged to place the other 63 revenue generating government owned Enterprises on the cost of collections list because Hajiaya Ahmed, minister of Finance Budget and National Planning had said that the 2023, N6.34 trillion naira with a project deficit of N12.4 trillion deficit and aggregate expenditures of N19. 76 trillion, may be difficult to sustain because of the dwindling oil revenue from the International oil market.
Hajia Ahmed, the Finance, Budget and National Planning minister, may have strengthened the resolve of the Senate to ensure that the 63 government owned Enterprises currently depending on monthly allocation from the government for their expenditures are placed on the cost of collection list during her presentation of on overview of the 2023 0 2025, Medium Term Expenditure Framework, MTF, and Fiscal Strategy Paper,FSP.
She had said that the government revenue for the 2023 Fiscal year was projected at N6.34 trillion, noting that N373.17 billion would be generated from the oil sector and N5.97 trillion from the non-oil sector, meaning that the bulk of the expected revenue for running of the government both at the Local, state and Federal level, would be generated by the government owned revenue generating Enterprises.
Many believe that even the Senate would have taken a second look on the decision it may not do it because of the over $40 billion owed External Financial institutions and debts owed the local Financial institutions which had remained a problem to the Buhari Administration, noting that servicing the external debts, particular, according to the minister is taking a huge chunk of the nation’s revenue.
Besides, placing the 63 GOEs, on the cost of collection list like NCS and FIRS, the government may have taken some other hard decisions in the 2023, Fiscal policy, as revealed to the Lawmakers by the minister. One of such hard decisions was planned by the Lawan led Senate was ‘’to reduce the import duty waivers proposed for the N19. 76 trillion 2023 budget with attendant deficit of N12.4 trillion by 50%.
That much was confirmed by Solomon Adeola, Chairman, Senate Committee on Finance. The Senate Committee on Finance Chairman, had said that without mincing words that ‘’the Senate would reduce the N6 trillion proposed waiver for companies in the 2023-2025, MTF/FSP, with revenue generating agencies. Senator Adeola, who could hide his feelings had said that the reduction in waiver for some importing Companies became necessary given the projected deficit of N12.4 trillion in the 2023 , budget estimates and current dwindling revenue profile of the nation’’.
The Committee may have come up hard on the Nigerian President when it said that it would no longer allow the government to keeping on borrowing from the external Financial Institutions that will be growing the country’s budget deficits. ‘’Borrowing trends cannot be allowed to continue unchecked’’, Senator had aid. The Senate Committee on Finance may discovered that the indiscriminate guarantee of import waivers by the officials of the Federal ministry of Finance, Budget and National Planning was one of the sources revenue leakage at the nation’s seaports and land borders.
