The Federation Accounts Allocation Committee (FAAC) has queried revenue shortfall of about N26.7 billion cby the Federal Inland Revenue Service (FIRS). The amount is in variance to the balance in the Central Bank of Nigeria (CBN’s) coffers. The difference in the figure spread across revenue channels under the purview of FIRS. These include the Petroleum Profit Tax (PPT), Value Added Tax (VAT) and Company Income Tax (CIT).
The difference in figure remitted to the federation account was traced between December 2018 and January 2019.
Piqued by the difference in FIRS revenue record and the balance in the federation account with the Central Bank, FAAC mandated CBN and FIRS to meet and reconcile the figure . The development, New Telegraph learnt, was intensely discussed by FAAC members at the last meeting. A subcommittee was raised with a mandate to look at it and revert to FAAC with its findings. “The sub-committee observed that FIRS reported N199.16 billion as total PPT and VAT collections in January 2019 while CBN’s component statement indicated N199.07 billion, thus showing a shortfall of N90.88 million. “In the same disposition, FIRS reported N321.23 billion as total PPT and CIT collections for December 2018 federation account, while CBN component statement indicated N294.62 billion, revealing shortfall of N26.61 billion,” FAAC document noted. This was as FAAC confirmed payment and receipt of $40.7 million by Nigerian National Petroleum Corporation/Nigerian Petroleum Development Company (NNPC/NPDC) in January 2019, thus ending a protracted drag in respect of crude oil allocation. A presentation by FAAC sub-committee to the Forum noted that: “Members may recall that NNPC/NPDC made a commitment to use a combination of cash payments and direct monthly allocation of crude cargo to offset the outstanding of $1.74 billion SPDC goods and valuable consideration indebtedness to the federation account. “Department of Petroleum Resources (DPR) has confirmed the receipt of $40.7 million from January 2019 crude oil allocation of 670,000 barrels for that purpose. The said amount has already been credited to the designated account meant to settle NPDC indebtedness,” FAAC noted. It requested NNPC/NPDC to provide prevailing crude oil price in their subsequent report to it. However, to deal with other contending unresolved issues between FAAC and NNPC, including its subsidiary, NPDC, an ad hoc committee was set up. “The ad hoc committee comprises NNPC, DPR, FIRS and post-mortem consultant. The committee is expected to complete its assignment before sub-committee’s next meeting,” FAAC stated. FAAC, a forum for representatives of three tiers of government, meets monthly for consideration and allocation of revenue to the three tiers – Federal Government, states and 774 local government councils in line with approved revenue formula. Over time, remittances of revenue into federation purse had been characterised by arguments. The NNPC, unarguably a major source of revenue for federation account, had been allegedly accused on several occasions of revenue short-change by FAAC. The NNPC/FAAC’s perennial controversy got to head last year. In 2018 alone, FAAC suffered more than six abrupt cancellations at the height of stalemate over non-compliance to full revenue disclosure and remittances by the state-owned oil firm. FAAC was displeased with indiscriminate high deductions by NNPC to offset Joint Venture Cash Call (JVCC) obligations. It took the intervention by President Muhammadu Buhari who ordered a special committee to come up with a new and transparent template for remittance.
Source: New Telegraph
