The revenue commission chairman said this on Wednesday.
In a move to halt further loss of revenue by the Federal Government as a result of observed discrepancies in revenue collections and remittances by two government agencies, the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) has commissioned the verification and reconciliation of such revenues.
RMAFC Chairman, Elias Mbam, said at the inauguration of 52 consulting firms mandated to carry out the verification and reconciliation that the exercise became necessary after it observed some irregularities in the remittances of revenue from some collecting banks engaged by the Federal Inland Revenue Service (FIRS) and the Nigerian Customs Service (NCS),
Though the RMAFC Chairman could not say how much the Federal Government may have lost through such observed irregularities, he however said the Commission views it as serious leakages that may have cost the federation account several billions of naira as revenue.
Following the observation in 2012, Mr. Mbam said RMAFC was compelled to make a presentation to the Federation Accounts Allocation Commission (FAAC), which approved the need to engage experienced consultants to conduct the verification and reconciliation exercise in order to recover any excess deductions and curb further losses through the leakages.
According to him, the leakage involved the decision by banks having agreements with the FIRS and NCS to collect certain charges, like cost of transaction (COT) and other charges, which are considered irregular and inconsistent with those approved by the RMAFC and whose details are unknown.
“Having identified those irregularities, it calls for the suspicion that something may be wrong beyond what the Commission was seeing, which required further verification and reconciliation by competent consultants to ensure that whatever service charges the banks were deducting from the final revenue remitted to the Federation Accounts are in compliance with the provisions of the various agreements with the two government agencies,” he said.
He said the 52 consultants were appointed in accordance with the provisions of the Public Procurement Act, 2007 to verify and reconcile the records for the period between January 2008 and June 2012, adding that if at the end findings follow a negative trend, the Commission would order further verification to be carried out on previous years, to help trace the extent of damage by the irregularity.
The exercise, which is expected to last between June 3 and August 15, would be supervised by a lead consulting firm, JK Consulting Company, whose principal is a one-time Accountant General of the Federation and Chairman of the Federal Inland Revenue Service (FIRS).
Part of the terms of reference of the Lead Consultant include the supervision and coordination of other consultants; development of data capturing and reporting template; verification and reconciliation of revenue flows from collecting agencies during the period in accordance with the terms of agreement between the banks and the FIRS and NCS, as well as the production of the report of findings and recommendation for submission to the Commission.
Other consultants has been mandated to cover assigned banks and revenue sources; reconciliation of all revenue flows from collecting banks to lead banks; reconciliation of all transfers from lead banks to the Federation Account in the Central Bank of Nigeria (CBN); verification of the remuneration paid to each lead and collecting banks were in accordance with the agreements, and submission of a comprehensive report of findings.
“For the purpose of clarity, I wish to make it clear that this exercise is not an attempt to audit the two agencies, but to ensure that the collecting banks comply fully with the terms of their agreement with both agencies,” he said.
Meanwhile, the Chairman said the Commission has already requested the Accountant general of the Federation (AGF) to open an account with the CBN into which all recoveries from the exercise would be paid into, pointing out that the consultants would be paid their professional fees from their collections, after which the balance would be remitted to the Federation Accounts for distribution to the three tiers of government.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
TEXT AD: To advertise here . Call Willie +2347088095401...