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Fiscal agency moves to halt new revenue formula

By Mathias Okwe, (Assistant Business Editor, Abuja) 
08 March 2016   |   1:51 am
Revenue Mobilization, Allocation and Fiscal Commission is to write President Muhammadu Buhari to seek the withdrawal of two recommendations.

Buhari• Panel to stop review of political officers’ perks
• Govt reduces salary bill by N2.293b

Against the backdrop of dwindling state funds and the delay by the Presidency in working on the revised revenue formula for the federal, state and local councils, as well as the proposed pay package for political officers, the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) has moved to stop them.

Indeed, the commission is to write President Muhammadu Buhari to seek the withdrawal of the two recommendations, one of which has been awaiting action for more than two years.

A competent source within the commission revealed the plan to The Guardian in an exclusive interview at the weekend. The fiscal commission is constitutionally empowered to fix the revenue sharing formula for the federation as well as salaries and perks for political office holders.

The current revenue sharing formula which allocates to the Federal Government 52.68 per cent; states 26.72; and local councils 20.60 percent of the federation revenue was arrived at by fiat through a treasury circular during former President Olusegun Obasanjo’s first tenure around 2,000 and never went through due process through legislation by the National Assembly.

Unfortunately, the new sharing formula completed over two years ago and which should have replaced the existing one, has suffered a lack of attention by the immediate past former President Goodluck Jonathan’s administration and the Buhari government as the current president is expected to give his assent to the review before forwarding it to the National Assembly for debate and consequent passage into law.

The same procedure is also required for the review of the political office holders’ pay package which was concluded more than a year ago and has been in the ‘pending tray ’on the president’s work desk without action.

Now, the source who confirmed the plan to seek the withdrawal of the two documents explained that the action had become necessary because of the current economic realities in the country which may no longer support the work of the two reviews which were undertaken during the oil price boom .

The source, a key official of the Fiscal Commission who preferred to remain anonymous said: “ We have just managed to form a quorum to meet because some of our members’ tenure ended recently. Now, what we intend to do is to seek the withdrawal of the new sharing formula which remains unattended to by both former President, Dr. Goodluck Jonathan and the incumbent for more than two years. Though we are worried, we are also saying it’s an opportunity for us to undertake further review in light of developments in the country’s revenue regime.

We would also be asking for the withdrawal of the political officers’ pay package which we had equally concluded but for which no action has been taken by the president. We also believe it’s an opportunity for us to rejig it in view of the current economic realities,” the source concluded.

Meanwhile, the Minister of Finance, Mrs. Kemi Adeosun said yesterday that through the ongoing BVN-based staff audit and enrolment in the Integrated Payroll and Personnel Information System (IPPIS), the Federal Government has removed 23,846 non-existent workers from its payroll.

Consequently, she said the salary bill for February 2016 had reduced by N2.293 billion compared to December 2015 when the BVN audit process commenced.

The information is contained in a statement by the Media Adviser to the Minister, Mr. Festus Akanbi who also said information available to the ministry suggested that this figure represented a percentage of the number of non-existent workers who had hitherto been receiving salaries from various ministries, departments and agencies.

It was further explained that an investigation into other
suspected ghost workers’ continued in conjunction with the Economic and Financial Crimes Commission (EFCC).

The Federal Government is also taking action to pursue to a logical conclusion, the recovery of salary balances in bank accounts as well as any pension contributions in respect of the ghost workers. This involves active collaboration with the concerned banks and the National Pension Commission (Pencom).

The ministry noted that the Military Pension Board had revised the amount payable for its due pension contributions on a monthly basis by N575million, following its annual verification for military retirees. This reduced the number of pensioners by 19,203 as a result of deaths since the last verification in 2012. The Federal Government, in its efforts to reduce personnel cost, is determined to continue the verification programme on a regular basis.

Due to the fact that personnel costs represent over 40 per cent of total government expenditure, the ministry explained that the Federal Government would continue to strengthen its payroll controls through measures such as undertaking periodic checks and the utilisation of computer-assisted audit techniques under its new continuous audit programme.

This will ensure that all payments are accurate and valid.Requirements for new entrants joining the Federal Civil Service have also been enhanced to prevent introduction of fictitious employees in future.

The ongoing exercise, which is part of the cost-saving and anti-corruption agenda of the Buhari administration, is key to funding the deficit in the 2016 budget, as savings made will ultimately reduce the amount to be borrowed.

However, reacting to the recent call by the leadership of the Association of Senior Civil Servants of Nigeria (ASCSN) that the panel members investigating the cases of indicted civil servants be drawn from both government and labour, the ministry explained that the request could not be acceded to, as the investigations were of a criminal nature and would therefore be handled by the appropriate investigative agencies.