FG orders agencies to immediately begin 50% remittance of IGR

FG orders agencies to immediately begin 50% remittance of IGR

 

The Federal Government has directed the Office of the Accountant General of the Federation (OAGF) to immediately implement the presidential directives on 50 per cent automatic remittance of the internally generated revenue of government-owned enterprises.

The directive is contained in a circular issued by Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

The circular obtained on Wednesday, titled, “Re: Implementation of the Presidential Directives on 50% Automatic Deduction from Internally Generated Revenue of Federal Government Owned Enterprises (FGOEs),” was dated December 28, 2023.

It read, “Further to Circulars Ref. Nos. FMFBNP/OTGHERS/lGR/CRF/12/2021 dated 20th December, 2021 on Revenue, Expenditure and IGR Remittances to the Consolidated Revenue Fund (CRF); the following guidelines are hereby issued for immediate compliance by all federal government agencies/parastatals for the collections, utilisation and remittances of IGR:

“All Ministries, Departments and Agencies (MDAs) that are fully funded through the Annual Federal Government Budget (receiving personnel, overhead and capital allocation) and on the schedule of Fiscal Responsibility Act, 2007 and any addition by the Federal Ministry of Finance (FMF) should remit one hundred per cent (100%) of their IGR to the Sub-Recurrent Account which is a sub- component of the CRF.”

The CRF is an account in which revenues from taxes, statutory allocations from federation account, and other federally-collected revenues are deposited and disbursed.

According to the circular, all partially-funded FG agencies/parastatals (receiving capital or overhead allocation from the Federal Government’s budget) should remit 50 per cent of their gross IGR, while all statutory revenues, like tender fees, contractor’s registration, and sales of government assets, among others, should be remitted 100 per cent to the sub-recurrent account.

The circular also directed all self-funded Federal Government agencies/parastatals (receiving no allocation from the FG budget) to remit 50 of their gross IGR, including all statutory revenue, line like tender fees, contractor’s registration, sales of government assets, etc., to the sub-recurrent account.

The circular further directed the OAGF to open new Treasury Single Account (TSA) sub-accounts for all federal agencies/parastatals listed on the schedule of Fiscal Responsibility Act, 2007 and any additions by the Federal Ministry of Finance.

It stated, “For the avoidance of doubt, the OAGF shall open new TSA Sub-Accounts for all federal government agencies/parastatals listed on the schedule of Fiscal Responsibility Act, 2007 and any additions by the Federal Ministry of Finance, except where expressly exempted.

“The new account opened for agencies/parastatal shall be credited with inflows in the old revenue collecting accounts based on the new policy implementation of 50 per cent auto deduction in line with Finance Act, 2020 and Finance Circular, 2021, 50 per cent cost to revenue ratio.”

It noted that the OAGF, subject to the categorisation of agencies, shall map and automatically effect direct deduction of the 50 per cent on gross revenue of self/partially funded agencies/parastatals and 100 per cent for fully-funded agencies/ parastatals as interim remittance of amount due to the CRF.

It said, “This is to improve revenue generation, fiscal discipline, accountability and transparency in the management of government financial resources and prevention of waste and inefficiencies.

“The revenue collection TSA Sub-Accounts currently operated and maintained by Agencies/Parastatals for receiving revenue from the public shall be blocked from access.

“The accounts shall be under the full control of the Honourable Minister of Finance and Coordinating Minister of the Economy and the Accountant-General of the Federation.”

The circular added that to strengthen the implementation of the presidential directives as conveyed via SGF Circular Reference: SGF.50/5.3/C.9/24, dated October 16, 2018 on Approved Revenue Performance Management Framework for GOEs, the Revenue and Investment Department and the Treasury Single Account Department of the OAGF shall supervise, monitor and carry out a monthly review of both the old and new accounts of the agencies/parastatals to ensure that only funds approved by the Minister of Finance and Co-ordinating Minister of the Economy (HMFCME) and the Accountant-General of the Federation (AGF) were credited to the accounts.

The circular explained, “The Federal Ministry of Finance (FMF) and OAGF will recommend appropriate disciplinary actions and sanctions against defaulting accounting officers of agencies/parastatals found culpable of violating the contents of this Finance Circular and in accordance with the fiscal Responsibility Act.

“Each Federal Government self/partially funded agency/parastatal shall not later than three months after the end of its financial year prepare and publish its audited financial statements/management account in accordance with the prescribed rules and forward copies to the OAGF for the review and computation of operating surplus in line with the approved template of the Fiscal Responsibility Commission/OAGF.

“The remittable portion of the adjusted operating surplus will be determined and paid to the TSA Sub-Recurrent Account after reconciliation.

“The final payment to be made to the TSA Sub-Recurrent Account for the year shall, however, be the higher of the 80 per cent of the adjusted operating surplus and the deducted amount from the TSA Sub-Rec Accounts of the affected agencies/ parastatals.”

It directed that all agencies whose budgets were funded through approved cost-of-collection were expected to submit their annual revenue and expenditure budget for review, adding that any expenditure not approved and or any surplus of revenue over expenditure shall be subjected to the rules guiding the computation of Operating Surplus.

The circular also directed the OAGF to generate auto receipts on direct deductions and remittances made by agencies/parastatals to the TSA Sub-Recurrent Account, which is a sub-component of the CRF.

Immediate past Finance Minister, Mrs Zainab Ahmed, in 2021 pruned the number of agencies under the schedule of the FRA from 122 to 65.