…Want independence for Auditor General of the Federation
By Omeiza Ajayi, Abuja
Experts on Taxation, Economics, Public Policy and Media have urged the federal government to take urgent steps at ensuring fiscal prudence particularly with regards to revenue generation and collection, advising against the use of consultants in the tax regime which they argued is detrimental to national revenue drive.
This was part of the communiqué issued at the end of a one-day public policy forum on, ‘Fiscal Governance and Economic Resilience in Nigeria: Emerging Issues and Policy Options’ organized by the Partnership to Engage, Reform and Learn -PERL, a United Kingdom Foreign, Commonwealth and Development Office FCDO – funded governance programme in Nigeria, held in Abuja.
The event drew thought leaders from the public and private sectors, academia, civil society groups and the media.
National Team Leader of PERL Engaged Citizens Pillar, Dr Adiya Ode in his welcome remarks recalled the ongoing case between Rivers State and the Federal Government on the collection of Value Added Tax VAT.
“The furore it has generated and the analyses thereafter are a reminder of the vulnerability of many of our economies at both state and federal level. In fact, it highlights the fact that many of our states do not have functional economies and are subsisting on allocations. But it doesn’t have to be like this.
“In 2015 Nigeria experienced a recession with a massive decline in GDP growth rate from 6.7% in 2014 to 2.7% in 2015. There were deliberations and discussions about fiscal sustainability. Indeed, the World Bank SFTAS program was a direct outcome of attempts to strengthen the economy of the states and build economic resilience. Despite these efforts, here we are on the brink again. Nigeria has a dubious honour in topping many of the negative HDI charts ranking alongside countries like Iraq, Afghanistan, and D.R. Congo who have experienced devastating wars. Even without the widespread insecurity currently bedevilling the space, service delivery especially in the health and education, is stagnated”, he stated.
At the end of the dialogue, participants recommended the need to reinvent Nigeria’s fiscal governance which the said will require complementary reforms to strengthen formulation and execution of the budget.
“The use of consultants in the tax regime is detrimental to national revenue drive, and thus, there is need to institute a vibrant revenue generation drive by public institutions instead of using consultants.
“The role and absolute independence of Legislative Oversight, Public Account Committee (PAC) and the Auditor General of the Federation, is sacrosanct in effective fiscal governance in Nigeria”, the communique stated.
Participants also asked for synergy and coordination among government agencies in fiscal governance in the implementation of the major frameworks, adding that innovative fiscal policies administration required in tackling underperforming or performing revenue generation mechanism of the agencies at both national and sub-national levels is key in effective fiscal governance in Nigeria.
Other recommendations were the need for public financial management reforms that will have a greater impact on transparency and accountability.
“The need for an integrated revenue architecture at the national and subnational levels working independently to enhance revenue drive in the robust fiscal governance of Nigeria.
“The need for urgent legislation to guarantee the independence of Auditor General of the Federation to enhance efficiency, transparency and accountability at all levels of governments.
“Capacity building among public officials in the preparation and implementation of fiscal governance strategic frameworks, especially at the sub-national level is important to re-energize the fiscal governance in Nigeria.
“The adoption of bottom-up approach, instead of the current top-down method in the preparation of the budget/MTEF should be encouraged, as that will not only enhance citizen’s engagement but also serve as enlightenment on the expected role of government to the citizens.
“Services that are meant for the states should be removed from Exclusive Legislative List to the Concurrent Legislative List for the purposes of a harmonious tax regime between the national and sub-national levels of government.
“The need for a strong fiscal governance system that requires strong fiscal rules and institutions, supported by measures that will strengthen the quality of spending in order to address corruption, transparency and accountability.
“Put in place a mechanism for the generation of data and evidence to support fiscal policy reforms that will improve government revenue and expenditure systems.
“Measures to maintain micro-economic stability such as: reducing inflation, implementation of foreign exchange management system that will improve inflow of Foreign Direct Investment, thereby addressing the issue of funding government projects/budgets.
“Putting public service delivery at the centre of public finance management as well as harmonization of all tax laws in the Federation to allow for more innovative ways of taxation that will avoid duplicity and multiplicity in collection of taxes across the three tiers of government in the country”.
The communique also demanded the centralization of the entire database linked with the National Identity Numbers of citizen on taxation to be domiciled with the tax authority, saying this will allow government have real time intelligence on the economic status of citizens and for planning purposes.