As the RMAFC bill awaits President Tinubu’s assent

After his inauguration, President Bola Ahmed Tinubu signed some important bills passed by the 9th National Assembly into law which include the Police Pension Bill, Electricity Bill, Data Bill as well as the Students Loan Bill.   Another important bill waiting for the president’s assent is the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Bill. […]

After his inauguration, President Bola Ahmed Tinubu signed some important bills passed by the 9th National Assembly into law which include the Police Pension Bill, Electricity Bill, Data Bill as well as the Students Loan Bill.

 

Another important bill waiting for the president’s assent is the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Bill.

RMAFC is a body with a wide range of statutory functions as regards the overall revenue issues including monitoring, disbursement and determining its allocation to the federal, state and local governments among other things.

To strengthen its operations, sections and clauses contained in the RMAFC Act 2010 were amended in the bill, treated and passed by the National Assembly to grant more powers to the commission to enforce the monitoring of accruals to and disbursement of revenue from the federation account in conformity with the provisions of the 1999 Constitution (as amended) among others.

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While old sections, clauses and parts in the bill were amended, others were either deleted or replaced with better ones to conform with the dynamics and changing realities as regards revenue and its utilisation.

The presidential assent to the amended bill into a new Act will bring a wide range of reforms and put in place machinery that will ensure not only prompt payment of revenues, but sanctions to apply in case of violations or abuse of the Act.

Major amendments

Although there are many amendments to the bill, there are major ones that are believed to be key to the efficient functioning of the commission.

To tackle the issue of inadequate funding of the commission’s operations, the amended bill provides that RMAFC, “Shall be funded by the three tiers of government and shall establish and maintain a fund which shall consist of and into which shall be credited.”

It also provided that, a minimum of 0.75 per cent of total Non-Oil Federation Revenue as cost of monitoring to be appropriated by the National Assembly for the purpose of the Capital and Recurrent Expenditure of the commission which will be subject to reviews.

Another significant amendment is the power given to the commission to apply sanctions in case of default or violation of the Act by government agencies as regards revenue.

Sections in Part 2 of the amended Act gave the commission powers to monitor accruals and disbursement of revenue from the Federation Account, enforce compliance of remittance and sanction any default or non-compliance by any person or group of persons or authority.

It is also empowered to “review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities: Provided that any revenue formula which has been accepted by an Act of the National Assembly shall remain in force for a period of not less than five years from the date of commencement of the Act.”

The amended Act also empowers RMAFC to enforce and recover unremitted revenue or under-remittance or diverted revenue into the Federation Account and sanction any government agency that fails or delays the remittance of revenue to the account.

It is to also monitor the operations of the revenue-generating agencies of the government of the federation to avoid leakages.

RMAFC is also empowered to cause an investigation into whether any person or body has violated any provision of Section 162 of the 1999 Constitution (as amended) and or of this Act with relation to payment of accruals into the Federation Account or disbursement of revenue from the Federation Account.

The commission shall also “Have the power to monitor the unspent revenue accrual to the Nigerian Upstream Regulatory Commission as well as the Nigerian Midstream and Downstream Regulatory Authority into Federation Account and to monitor NNPC Limited dividends meant for the Federation.”

Calls for president’s action

The sponsor of the Bill, Senator Olubumi Adetunmbi (Ekiti North), said the amendment would reinforce the commission’s mandate and powers to, among other responsibilities, monitor revenue generation and disbursement on behalf of the people and government of Nigeria.

He said: “The commission despite being a body established by the constitution, and whose independence is further guaranteed by the Act establishing it, has been hamstrung by certain limitations.

“In a world faced with the twin challenges of dwindling revenue and spiralling population and its attendant pressure on scarce resources, the imperative for prudent management and effective utilisation of our commonwealth cannot be over-emphasised.

“This is particularly instructive bearing in mind that the Act came into force in 2004 and has not been updated to reflect the changing realities of the time.”

The Centre for Anti-Corruption and Open Leadership (CACOL) in a statement also called on President Tinubu to assent to the bill to strengthen the commission to discharge its duties.

The statement, signed by its chairman, Debo Adeniran on behalf of the Civil Society Coalition Against Corruption, stated that RMAFC is one of the most poorly funded agencies, compared to other constitutional bodies like the Independent National Electoral Commission (INEC), National Population Commission, National Assembly and others, which impedes its operations.

According to the coalition, the commission plays an important role in the nation’s political economy through its statutory functions of ensuring an equitable revenue-sharing formula to the three tiers of government and fixing remuneration for public, political and judicial office holders at all levels of government which it said has contributed to the stabilisation of the democratic processes, encouraging good governance, transparency and accountability and development in the country.

“In the area of reducing revenue leakages and enhancing revenue generation, the commission, has succeeded in expanding the sources of revenue to the Federation Account through the recoveries of hundreds of billions in the recent past.

“It is gratifying to note that in order to ensure synergy in revenue generation, remittance and monitoring, the commission also continues to engage critical stakeholders like the Federal Ministry of Industry, Trade and Investment, the Customs Service, Federal Inland Revenue Service, NNPC and its subsidiaries and the Central Bank of Nigeria to strategize on how to reduce revenue loss through indiscriminate granting of waivers and tax holidays.”

The coalition further noted that the review process of the RMAFC Act amendment involved extensive and in-depth research and studies in various areas of Nigeria’s political economy, call for memoranda, consultations, sensitisation workshops, collection and collation of data and study of other similar federations in respect of fiscal arrangements, public hearings and administration of questionnaires involving huge expenditure.

It added that, the exercises took the commission to all the 36 states and the FCT, as well as the 774 local councils across the country to sensitise Nigerians to make input into the review process.

It therefore stressed the importance of RMAFC’s role in stabilizing the nation’s political and socio-economic development which calls for the need to adequately fund the commission through increased budgetary allocation on first line charge to enable it to effectively supervise revenue generating agencies like FIRS, NNPCL and Customs and carry out its other constitutional duties.

The coalition expressed optimism that the bill when eventually signed by the president, will reposition the commission by giving it the needed strength to perform optimally as it will remove financial, legal and regulatory encumbrances that made it a toothless bulldog.

It, however, lamented that, “While it is apt to note that PBAT does not waste time in signing bills into law provided they serve the people’s best interest as demonstrated in his first few weeks of assumption of power, it is equally concerning that the RMAFC Bill is still in Mr. President’s incoming tray awaiting his final assent.”

It, therefore, called on all other critical stakeholders like the National Economic Council, the Nigeria Governors’ Forum, ALGON and the media to bring their influence to bear on the Presidency to do the needful, expedite action for the bill to see the light of the day.

“It is our strong belief that the signing of the bill into law by Mr President will translate to stoppage of leakages in revenue generation, increase more revenues into the Federation Account and generally promote transparency and accountability in the management of our commonwealth in consonance with President Bola Ahmed Tinubu’s Renewed Hope mantra. A stitch in time saves nine,” the coalition stated.

As the nation faces economic challenges to meet its financial obligations amidst corrupt practices and revenue leakages, the need to strengthen regulatory bodies in the financial and revenue sector needs to be speeded up by the present administration, and signing the RMAFC Act into law may be a good beginning.