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CEOs of Government Owned Entities to sign performance contracts on revenue targets

Youth Party faults FG’s decision on subsidy removal suspension

The Chief Executive Officers and key management staff of Government Owned Entities (GOEs) are now expected to sign performance contracts which will set financial indicators and targets for each of their institutions.

Zainab Ahmed, Minister of Finance, Budget, and National Planning announced this in Abuja Tuesday during the public presentation of the N13.08trn 2021 budget which was last week presented by President Buhari to the National Assembly.

Ahmed also announced that the cost-to-revenue ratio of GOEs has, by presidential directive been limited to a maximum of 60-70%, while regular monitoring and reporting of revenue and expenditure performance of those Entities will be undertaken by both the budget office of the federation and the office of the Accountant Generation of the Federation.

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She said these are some of the critical initiatives as government retools strategies on revenues which have plunged significantly this year on account of covid-19 pandemic and low oil prices.

According to her, the current sub-optimal revenue performance of most GOEs will be addressed through effective implementation of the enhanced Performance Management Framework.

It would be recalled that Buhari had expressed serious concerns over government poor revenue generation, and directed that incomes of Government Owned Enterprises (‘GOEs’) be scrutinized henceforth and limits imposed on their cost-to-revenue ratios.

Ahmed also mentioned that the finance bill 2020, which will accompany the 2021 budget proposal, will contain measures to advance the Sustainable Revenue Generation Initiative (SRGI), and hinted plans to work closely with the National Assembly to amend relevant laws that would drive smooth implementation of the revenue initiative.

The Minister further stated that the Executive has included a Tax expenditure Statements (TES) as part of documents sent alongside the 2021 budget to the National Assembly. The TES seeks to dimension the cost of tax waivers/concessions .

Tax expenditures are currently estimated at: Company Income Tax, N1.18trn; VAT, N3.1trn; Customs Duties N347bn; VAT on Imports, N64bn.

“Going forward, we will set annual ceilings on Tax Expenditures to better manage their impact on already constrained government revenues,’ Ahmed said.

…details later …