Government revenue trapped in commercial banks

The Revenue Mobilisation Allocation and Fiscal Commission has said a substantial amount of government revenue remains trapped in the vault of commercial banks unremitted.

The commission also expressed concern about the non-remittance of monies to the government coffers by revenue-generating agencies to the extent that a large chunk of money has been trapped in the banks.

The Chairman, RMFAC, Mohammed Shehu, raised the alarm while receiving the Comptroller-General of the Nigerian Customs Service, Bashir Adeniyi, on Wednesday in Abuja.

The RMAFC is a Federal Government agency responsible for mobilising and allocating revenue to the three tiers of government in Nigeria.

The commission also monitors the financial activities of the federal, state and local governments to ensure their compliance with the law.

The commission had recovered unremitted revenue totalling over N500 billion for the federation from some government-owned institutions.

According to the RMAFC chairman, the abuse of procedure that results in loss of revenue, including evasion of payment of levies, duties and other related revenue, has created room for a lot of funds to be trapped with the stakeholders, especially the commercial banks.

Shehu added that the commission is ready to take up the responsibility to fulfill its mandates in line with the subsisting presidential directive to block revenue leakages, irrespective of its source.

He said, “As you are aware, the major issue of concern to RMAFC is the non-remittance of monies to the government coffers, which has created room for a lot of funds trapped with the stakeholders, especially the commercial banks.

“We, therefore, seek to leverage your timely visit to enlist your support for the commission to recover these funds and deliberately improve revenue mobilisation, block revenue leakages and advise the present administration on appropriate measures to increase revenue generation for the Federation Account.”

Consequently, he sought the CG’s support to recover the funds, deliberately improve revenue mobilisation and block revenue leakages.

In his remarks, the Customs boss thanked the commission for drawing its attention to possible leakages, stressing that the agency is ready to its surpass revenue target of N3.2tn last year.

“The Nigeria Customs Service is empowered by Section 4 of the NCS ACT 2023 to collect and account for revenue from import duties, excise duties, and other taxes and levies. The service receives an annual revenue target from the Federal Government. For the year 2023, the NCS was given a target of N3.7tn and generated N3.21tn, which represents 87 per cent of the total revenue target.

“The Customs pledges its unalloyed support and understanding for what the commission is set to do and that is promoting and enhancing the environment under which we generate our revenue and ensuring that there will be proper accountability through remittances of revenue collected and most importantly block whatever revenue drains that we may have in our system. We know those areas where there could be leakages and we are asking the right question to resolve them.”

Adeniyi also pledged to ensure that every kobo and naira collected by the agency is remitted fully.

Speaking further, the RMAFC chairman urged the government to authorise the customs as the sole revenue-collecting agency at the ports to boost efficiency.

“Our ports have so many agencies that are operating and we believe to some extent is a hindrance. we just have too many organisations and we envisage a situation where a new model can come up that the NCS may be the only agency that will be at the port to do the assessment and put the necessary things in place so that the revenue will be done without much interference from other various agencies,” he added.