After Order to Debit Customers' Bank Accounts, FG Begins Automatic Deduction From Agencies
- The federal government will begin an automatic 50% deduction from government-owned agencies revenue
- The new directive is aimed at boosting government revenue and closing loopholes exploited to steal and shore up revenue
- There is a penalty attached for agencies that fail to comply with the new directives
Office of the Accountant General of the Federation (OAGF) has been mandated to begin implementation of a 50% automatic deduction from the internally generated revenue (IGR) of Federal Government Owned Enterprises (FGOEs).
The move is aimed at plugging leakages as the federal government continue its efforts to increase its non-oil revenue.
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The directive was contained in a circular issued by Wale Edu, the Minister of Finance and Coordinating Minister of the Economy.
The circular 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.
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Government moves to boost revenue
According to Edun, the deducted amount will then be remitted to the Consolidated Revenue Fund (CRF).
The CRF is an account in which revenues from taxes, statutory allocations from the federation account, and other federally collected revenues are deposited and disbursed.
The circular reads:
"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 collection, utilization, and remittance 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 listed on the schedule of the Fiscal Responsibility Act, 2007, as well as any additional ones by the Federal Ministry of Finance (FMF), should remit one hundred percent (100%) of their IGR to the Sub-Recurrent Account, which is a sub-component of the CRF"
ThisDay reports that the circular stated that all partially-funded federal government agencies/parastatals (receiving capital or overhead allocation from the federal government’s budget) should remit 50% 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% to the sub-recurrent account.
The circular also directed all self-funded federal government agencies/parastatals (receiving no allocation from the federal government 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.
More instructions for government agencies
The circular further directed the OAGF to open new Treasury Single Account (TSA) sub-accounts for all federal agencies/parastatals listed on the Fiscal Responsibility Act, 2007 schedule 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.”
Access, GTB, UBA others to debit customers bank accounts for FG
Earlier, Legit.ng also reported that the federal government has instructed all Nigerian banks to debit customers with domiciliary accounts.
The debit is for old foreign currency transactions carried out between 2021 and 2023 by customers and will be remitted to the government.
Access Bank, GTB, UBA, Zenith, and other commercial banks have sent messages to customers to expect the debits.
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Source: Legit.ng
