There is palpable fear in the corridors of power that the Federal Government’s revenue projection for this fiscal year may not be realised due to a number of factors, including oil theft, IFEANYI ONUBA writes.
There is anxiety in government circles that crude oil theft by pipeline vandals, failure of revenue generating agencies to fully remit what they generate into the Federation Account and inefficiency in tax collection may threaten the realisation of the N11.34tn federal revenue target for the 2013 fiscal year.
The Director-General, Budget Office of the Federation, Dr. Bright Okogu, confirmed the government’s anxiety about the likely revenue shortfall.
Okogu, in a document entitled, ‘FGN 2013 budget: Fiscal consolidation with inclusive growth,’ a copy of which was obtained by our correspondent, highlighted the challenges as well as other growth-promoting initiatives of the budget.
“Revenue challenges facing the budget are independent revenue non-full remittance by revenue generating agencies; taxes collection efficiency issues (Federal Inland Revenue Service, Nigerian Custom Service); pipeline vandalism and oil theft,” he said.
Curiously, according to figures obtained from the monthly allocations to the three tiers of government by the Federation Accounts Allocation Committee, the country only realised N1.818tn as gross federally collected revenue in the first three months of 2013.
The N1.818tn revenue for the first quarter was earned as follows: January, N651.26bn; February, N571.7bn; and March, N595.71bn.
Going by the first quarter revenue trend, the country may only realise about N7.3tn for the 2013 fiscal year unless the revenue generating agencies step up their efforts.
Of the N11.34tn projected gross federally collectible revenue, the Federal Government is expected to retain N4.1tn made up of N2.358tn oil revenue and N1.742tn from non-oil sources.
The N1.742tn non-oil revenue is expected to be generated as follows: Value Added Tax, N127.05bn; Companies’ Income Tax, N457.12bn; Customs, N412.90bn; independent revenue, N455.78bn; Federal Government’s balance of special accounts, N28.02bn; and unspent balance of the previous year, N261.21bn.
Of the revenue, the Federal Government alone is expected to spend N4.987tn made up of N2.386tn for non-debt recurrent expenditure, while capital expenditure will gulp N1.621tn.
The Nigerian oil sector has lately witnessed disruptions due to facility shutdowns. For example, the activities of vandals and oil thieves have affected production of Bonny Light and Forcados grades as well as Qua Iboe.
The gross revenue collected for the month of February 2013, according to figures from the Federation Accounts Allocation Committee, was N571.676bn. This indicates a decrease of N79.589bn or 12.2 per cent over the N651.265bn received in the previous month.
While the oil sector has benefited immensely from the relative stability in international crude prices and naira exchange rate against the dollar; its contribution to real Gross Domestic Product has been on the decline.
For instance, the sector’s contribution to GDP in the fourth quarter of 2012 was 12.59 per cent, lower than the 13.57 per cent recorded in the corresponding quarter of 2011.
Figures obtained from the National Bureau of Statistics put the average daily production at 2.14 million barrels in the fourth quarter of 2012 as against 2.44 million barrels in the corresponding quarter of 2011.
These figures, with the associated gas components, resulted in a growth rate in real terms of -0.79 per cent in oil GDP in the fourth quarter of 2012 compared with -0.08 per cent for the corresponding period in 2011.
Apart from the dwindling contribution of the sector to economic performance due to illegal bunkering, Okogu said the failure of some revenue generating agencies to remit revenues to the Federation Account was also disturbing.
By the provisions of the Fiscal Responsibility Act, 2007, all revenue generating agencies are mandated to remit revenue to the government based on an operating surplus framework.
Okogu said, “When I say challenges, they are not peculiar to this year’s budget. It is the type of challenges we face and which we are fighting to rectify, and one of them is the revenue side.
“The independent revenue, which is the non-full remittance, which we sometimes experience with some of the agencies, we are working hard and the National Assembly has also contributed in this respect to make it clear that all money that are due to government belongs to the government and not to people who belong to those places.
“If you are the chief executive officer of those government agencies, the money that is generated from the efforts of that agency belongs to the owner of the business and that owner is the government and the Nigerian people.
“We are going to be having sessions with the revenue generating agencies so that we can reach a better way for them to increase collection and to make sure they remit all money that is collected to the government.”
A report of an investigation conducted by the House of Representative Committee on Finance showed that about 60 agencies considered as major revenue earners either spent the money they collected on their operations or simply failed to remit it to the Consolidated Revenue Fund of the Federal Government.
The committee, headed by Mr. Abdulmumini Jibrin, revealed, for instance, that out of the N3.06tn the agencies generated in 2009, only N46.8bn or 1.53 per cent was remitted to the government.
In 2010, the sum of N3.07tn was generated but only N54.1bn or 1.76 per cent was remitted. For 2011, the generated figure was N3.17tn, out of which N73.8bn or 2.33 per cent was remitted.
The report added that out of the N189bbn expected to have been remitted as of October 2012, only N80bn was remitted, leaving a shortfall of N109bn.
In all, the committee found out that the total remittance to government for the three years was a paltry N254.7bn out of the total N9.4tn revenue generated.
In the oil sector, figures from the Petroleum Products Marketing Company Limited and Nigerian National Petroleum Corporation showed that N190bn was lost to pipeline vandals between 2011 and 2012.
Details of the loss showed that while revenues loss to crude oil theft decreased substantially within the period, those lost to theft of refined products, however, increased substantially.
In 2011, pipeline vandalism for the theft of crude resulted in the loss of N90bn, while theft of refined products resulted in the loss of N20bn in the same year.
(Punch)
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com