FG targets fiscal prudence with proposed RMFAC reform law

…Law proposes jail terms, other penalties

The Federal Government’s proposed Revenue, Mobilisation, Allocation and Fiscal Commission (RMFAC) bill aims to tighten revenue management, especially from revenue-generating ministries, departments and agencies amid the growing financial burden on the nation.

The proposed law, sponsored by Bamidele Opeyemi, the Senate leader, which seeks to repeal the RMFAC Act 2004 2004, and enact the RMFAC Bill 2024, has passed the third reading at the Senate and is now awaiting President Bola Tinubu’s assent.

The reform, part of broader efforts to boost government revenue, is designed to tighten the monitoring and distribution of federal revenues. It empowers the RMFAC to take a more active role in scrutinising government expenditure.

The law also introduces stringent penalties, including jail terms for MDA officials who fail, neglect, or divert funds meant for public coffers, signalling the government’s stance on fiscal misconduct.

The amendment seeks to empower RMFAC with expanded regulatory and enforcement capabilities to ensure that all revenues collected on behalf of the government are properly accounted for.

Section 6 sub-section 1(f) of the existing law was expanded to accommodate new functions, including the power to monitor any receipts arising from the operation of any law; returns arising from one in respect to property held by the government of the federation; return by way of interest on loans and dividends in respect of any property by the government.

The bill introduces a new section 17 on offences and penalties to enable the commission to apply sanctions in case of violation by government agencies as regards revenue.

Sub-section 1 expressly makes it unlawful for revenue-generating agencies to withhold revenues generated into the federation account.

Sub-section 3 proposes that a person who unlawfully or fraudulently appropriates or diverts to himself or any other person, any revenue disbursed from the federation account, commits an offence and is liable on conviction to a fine of 10 percent of the amount fraudulently appropriated. This is in addition to refunding the amount fraudulently diverted; imprisonment for a term of not less than 10 years or both.

Sub-section 2(a) proposes that a member of the board of officers of any commission or revenue-generating agency who fails, refuses, diverts, delays or neglects to remit money collected on behalf of the government within 30 days of such collection, commits an offence and is liable on conviction to a fine of at least N1 million or imprisonment for a term of at least five years or both. Sub-section 2(b) proposes that any public official who knowingly or wilfully makes a false statement of account to the commission commits an offence and is liable to conviction to a fine of at least N1 million, at least one-year imprisonment, or both.

The proposed law also introduces section 18, which gives the commission the power to make regulations or issue guidelines as may be necessary for giving provisions of the Act effect.

To strengthen the commission’s efficiency, the bill proposes that the fund of the commission shall be a direct (first-line charge) appropriated by the National Assembly.

These proposed amendments come as Nigeria grapples with economic challenges, including high debt servicing costs and a growing demand for improved public services. The President Bola Tinubu-led government has prioritised revenue generation as part of its economic agenda, aiming to reduce dependence on oil and boost non-oil revenues.

The National Assembly has severally raised alarm over the failures of revenue-generating MDAs to remit funds into the government coffers. The Senate recently disclosed that no fewer than 60 federal agencies failed to remit over N3 trillion in generated revenue into the federation account between 2014 and 2020.

In 2020, the Senate noted with concerns that out of the 300 revenue-generating agencies, only about 60 were being monitored by the Office of the Accountant-General of the Federation.

This proposed legislation seeks to give the commission enforcement powers to monitor accruals to, and disbursements from the federation account.

Abdullahi Abubakar, chairman of the Senate Committee on National Planning and Economic Affairs, emphasised the importance of the bill amid dwindling national revenues and Nigeria’s rapidly growing population. He stated that the Act, last updated over two decades ago, no longer reflects the nation’s evolving economic realities.

According to him, the primary objective of this bill is to reinforce the mandate and powers of the Revenue Mobilisation, Allocation, and Fiscal Commission as the constitutionally recognised body responsible for monitoring revenue generation and ensuring its equitable disbursement among the three tiers of government.

Samuel Nzekwe, an economic expert applauded the bill, noting that it would block leakages and boost government revenue.

He, however, urged the Federal Government to explore more sources of revenue to meet the growing financial and developmental demands of the nation.