…vow to deal with NIMASA, FAAN, NIWA, other MDAs for failing to appear

…our revenue not enough to pay staff-Garba, CAC boss

…seeks policy to make CAC letter condition for business with govt

By Levinus Nwabughiogu-Abuja

House of Representatives, Tuesday said there will be zero budgetary allocation to the Corporate Affairs Commission, CAC, for failing to make appropriate remittances into the Consolidated Revenue Fund of the Federation between 2016 and 2019.

The Commission, instead, spent funds it generated over the years on itself.

Feeling disappointed, the House through its Committee on Finance mandated the Budget Office and the Office of the Accountant General of the Federation to effect the directive pending when the Commission’s financial outstandings were cleared by the Committee.

The chairman of the Committee, Hon. James Faleke handed down the directive when the Registrar General of the Commission, Abubakar Garba appeared before them with a presentation at the ongoing interactive session on 2022-2024 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) in Abuja.

READ ALSO:No budgetary approval for CAC until financial report is submitted ― Reps

Noting that CAC’s expenditure had always outweighed the income, Faleke insisted its budgetary allocation will be withheld until it submitted its financial report from 2016 to 2020.

He said: “I have worked in a private organisation before coming to the House of Reps, and they will always regulate their expenses and not spend beyond what they generate.

“In your case, you borrow money upfront even before the money comes, therefore, you will have to submit your 2016 -2020 financial report before you are granted an audience for the 2022 budget.

“You expended what you do not generate, this agency needs a total overhaul to turn it back to what is supposed to be.

“Today all the registration is done online, yet you are still carrying unbearable overhead, things need to change”.

Faleke also warned other agencies of government yet to appear before the Committee to do so in their best interest.

“We are getting to the end of our consideration of MTEF/FSP 2022-2024 forwarded to us by Mr. President and as directed by the House. We decided to stay back on our holidays to carry out this national assignment.

“We have observed that some agencies are avoiding to come and present their papers before us and we want to make it abundantly clear that any agency of government that refuses to appear and defend their revenue profile and expenditure will be properly taken care of by the House.

“We want to use this opportunity to call on the management of NIMASA. For NIMASA this is the second time we are making this announcement. They must be forward their documents and declare their revenue profile. FAAN is supposed to come here tomorrow and there will be no more room for postponement. They must come and defend their sources of revenue line item by line item.

“National Lottery Trust Fund must come here and defend the income they receive and the way they are managing that fund. NDIC is supposed to appear before us today, but we are yet to see them, Standard Organisation of Nigeria, National Inland Waterways Authority are also supposed to appear before and they must appear before Thursday.

“Do not allow us to take are not palatable to the agencies”, the lawmaker said.

Responding to the revenue shortfalls, CAC Registrar, Garba reported that internally generated funds were not sufficient to run the operations of the agency.

According to him, the Commission only recorded a leap when he came on board.

He said that sources of revenue of the commission included company incorporation, business name registration, incorporated Trustees, increase in share capital, registration of charges and mortgage, certified true copies, sale of forms and commission publication, compliance revenue, filing of annual return and other sources such as procurement process.

He said: “Over the years, we have operated in a very difficult environment and until last year, our revenue could not support our expenditure. For the first time since our establishment, we were able to record a revenue of N19 billion.

“In 2018, we spent about N12.2 billion while making revenue of N11.2 billion. What happened is that we had to carry over some of the liabilities. These liabilities were mainly pension deductions, tax and other statutory deductions which were not being paid as and when due. That continued until 2020. We had to settle most of the backlog.

“Deductions were being made but they were not remitted to the appropriate quarter because the money was not enough to meet our operations. The same thing with tax. What was happening was that third-party bills were being paid.

“Until last year, the revenue was not enough to pay staff and carry out other expenses. So, we were not remitting anything until when I took over in January last year.

“We had an outstanding assessment of N435 million which is operating surplus that was due from 2014 to 2017. We have paid for that. There was an assessment of N809 million for 2018 and 2019 which we also paid last year.

“We had tax arrears for 2018 and 2019.
But our tax consultants were able to get us a reduction and we had to pay about N570 million. On pension for the two years, we paid N1.2 billion. We have been able to clear up to March 2019 and we intend to pay the balance if we have any surplus from our staff cost.

“There is a new system from the office of the Accountant General where a percentage of every money that drops into your account is taken on account of your operating surplus.

“By the provisions of the Fiscal Responsibility Act, we are supposed to spend our revenue to cover our cost and remit the surplus. But we never had any surplus until 2020”.

Asked about the number of registered companies in Nigeria and the compliance rate in terms of filing their annual return, Garba said they stood at 2 million.

“As of today, we have close to two million companies registered in Nigeria.

“These companies are supposed to file an annual return every year. When they make any change either in the composition of their board, when they increase their share capital, or when they make any change, they notify us and pay some fees.

“But the area we had challenges before now is in the area of their annual return. Most companies were not filing, but we have devised a way of enforcing compliance and companies are sitting up now. We getting to about 50 percent compliance. If you check our portal now, it tells you whether a company is active or inactive.

“Before now, somebody will be making millions and will not pay the N5000 he is supposed to pay to CAC annually. A lot of Nigerians and foreigners are conscious of that and before they do business with any company now, they do a search which is free. The search tells you the name of the company, the registered address, and the status. This is restoring sanity and many companies are coming up to file their return.

He however disclosed a plan to make it compulsory for companies wishing to do business with the government to present a letter from the CAC.

“We have made a proposal on how to increase our revenue. We have presented a memo to the Federal Executive Council to make it mandatory for any company that wants to engage in public procurement to provide a letter of understanding from CAC before it can be qualified to do that.

“It is similar to what you have with Pension and NSITF. That is still in view and has not been considered yet. But we have device other ways of enforcing this complaince”, he said.