Tax reforms committee proposes daily sharing of FAAC funds
The Presidential Fiscal Policy and Tax Reform Committee has unveiled plans to transition from monthly to daily disbursement of allocations across the three tiers of government.
This is in a bid to revamp the Federation Account Allocation Committee disbursement mechanism.
The committee’s Chairman, Taiwo Oyedele, disclosed this while speaking at a public consultation workshop in Abuja on Monday,
He emphasied the need to modernise the current system which he likened to antiquated practices dating back to 1814.
Under the proposed reform, FAAC will adopt a daily disbursement strategy, a departure from the traditional monthly allocation meetings.
“We believe the system can be configured to credit the accounts of local, state, and federal governments daily,” Oyedele stated.
He revealed that the planned reform has got the endorsement of key stakeholders, including the Accountant General of the Federation.
He further stressed that the shift aims to streamline operations, redirecting the focus of monthly FAAC meetings towards national fiscal strategies rather than routine reconciliations, which could be delegated to junior accountants.
Addressing Nigeria’s collection costs, which vary from four per cent to over 30 per cent, Oyedele stressed, “If an agency cannot collect revenue at one per cent, it should not be collecting it at all.
We are serious with the one per cent and it should cut across everybody, if you cannot collect revenue with one per cent, then you should not be collecting it at all. That’s why we were saying let government agencies focus on the primary reason they were set up for.”
He added, “If they are not set up to collect tax, they can’t be efficient and competent in doing it. Things will work better if everybody plays to their strength there’s a reason why every country has their revenue collection agency and not to replicate that function and be expecting that everything will be fine. A country like South Africa is under one per cent.”
