An audit report by renowned accounting firm, Klynveld Peat Marwick Goerdele (KPMG) has indicted federal government revenue generating firms for non- remittance of over N8trillion to the coffers of government.
This revelation was made by Gombe State Governor, Ibrahim Dankwabo, on behalf of the National Economic Council (NEC ) in Abuja, on Thursday while briefing State House Correspondents after the NEC meeting presided over by Vice President Yemi Osinbajo.
Dankwabo who said the audit covered the period of 2010 to 2015, added that it will be extended to cover up to 2017.
According to him: ” KPMG presented the report of the technical audit of the revenue generating agencies (RGAs ) concluding that a total sum of N526 billion and USD$21 billion was under-paid to the Federation Account.”
Dankwabo said the disclosure has forced NEC’s Ad-hoc Committee chaired by Gombe State Governor with members including Governors of Edo, Kaduna, Akwa Ibom, Lagos and the Finance Minister to recommend the refund of the amounts under-paid.”
NEC said it has adopted the presentations and reports of the KPMG and the recommendations of its Ad-hoc Committee including a resolution to identify instances where there appears to have been criminal infringements and forward such to the Attorney-General of the Federation and the Legal Committee of the National Economic Council for further action.
Following the revelations, the Council said it has also resolved ” to pursue strengthening of the NNPC governance structure to prevent further recurrence of such gross under-remittance by the NNPC and other RGAs”
The bulk of the unremitted funds, BusinessDay gathered, was from the operation of the Nigeria National Petroleum Corporation (NNPC).
Federal government had Wednesday directed the Department of Petroleum Resources (DPR) to close down all filing stations within 10 kilometres of Nigeria’s border to halt smuggling of petroleum products.
Chairman of Nigeria Governors Forum (NGF) and Governor of Zamfara state Abdulaziz Yari disclosed after meeting with Vice President Yemi Osinbajo at the Presidential Villa, Abuja, that the reason for the closure was to block leakages in revenue accruable to the government and check smuggling of petroleum products across Nigeria’s borders.
According to him, “We raised three issues, one of which was on the issue of royalties.
“Each and every barrel taken out of the country there is either 17 or 24 percent of it as royalty and there is 17 or 20 percent as tax.”
The Governors had expressed concern following reports by the Department of Petroleum Resources (DPR), which revealed that the NNPC was not remitting any payment of royalty.
The Governors also noted that the NNPC is making payment on behalf of Nigeria on Cash-call contributions, as well as payment of cash call arrears of Nigeria’s contribution.
“But, our main concern is that in 2015, they said about $16.8 billion which is outstanding was not paid by the last administration and they negotiated it down to $5.1 billion according to them. What we said specifically is that they should bring to us how much they have paid from 2015 to date and what is outstanding.”
“One of the resolutions of NEC today is to extend the audit to June 2017. So the audit will continue for the remaining agencies. It is NNOC, NPDC, DPR, Customs, Federal Internal Revenue Services, NPA, Maritime Authorities, all the revenue generating agencies and the details of the infringement are contained in the report. Because it is voluminous report there are a lot of items that are there”
NEC also took the decision to set up a sub-committee which will be an arm of the legal committee of NEC that will delve into details of these kinds of infringements and make sure that those issues that are criminal and require prosecution will be handled by office of the Attorney General of the Federation.
The issue of subsidy was also discussed at the NEC meeting but was later referred back to the sub-committee on remittances
“We are doing the nitty, gritty with NNPC in terms of remittances. Don’t forget that the reason we got it right in 2016 on the NNPC side is because the oil prices were too low.
“It was easy for everyone to get fuel into the country and then make its profit. So, when the price started jacking up then the marketers started adjusting back because they need to have a template of cost recovery and how they are going to make up the difference from the pump price to the landing cost of what they are importing.”
“Our problem is the volume, the quantity of consumption which is not acceptable. Working with the governors so many decisions were taken but by next month, we are going to adopt that position either for the governors to take responsibility for the subsidy in their states based on the consumption or we look at other ways.”
“For instance, if you say we paid N800 billion subsidy, you will ask who are we paying the subsidy to? And if you look at infrastructure development and capital programme of the federal government, it is about N1.1 trillion, almost 70 percent of what you are spending developing the economy.
“If there is no infrastructure development then you cannot talk about development of the economy. N800 billion is a huge amount that we must look at it, who is benefiting from it. So we are coming up with a strategy, we are going to meet in the month of May and June. By next meeting, we will definitely come up with a position of the government at both level of volume of what is being brought into the country and what the state and federal government collaborate to check,” he said.
Tony Ailemen, Abuja
