Single revenue account and pay direct policy

BY EMMANUEL NICHOLAS

It is only natural that when fecund pecuniary managers take over leadership positions in a country, they devise policies that will ensure more productivity and cut wastages in the polity.

Governor Udom Emmanuel as a core finance expert of over two decades knows that operating multiple tax accounts in banks will open windows for commercial bank to engage in unholy alliances with revenue managers to misappropriate funds that was meant for the growth of the state. The commercial banks that manage such multiples accounts use government funds to trade without intimating the owners because the account holders do not receive electronic alert of payments. These roguish elements in the financial institutions only transfer the funds into the main account known to government after many gains from lending and financing of commercial projects for turnovers.   

It is quite interesting to note that before now, there were leakages generally in the country over the operation of multiple tax accounts by states and the nation at large. During this period, the banks open multiple accounts for one single revenue collection making it very problematic for government to monitor and discern the precise revenue engendered by the state at the end of every month as the ‘’PAY DIRECT SYSTEM’’ was highly compromised.

‘’Pay Direct’’ is an internet based electronic payment solution designed for secure commercial transactions between government and tax payers. It allows government to have accurate amount of revenue the state collects each day, as each payment made by persons or organisations sends an immediate electronic driven alert to coffers of the government.

This also allows the government to do proper planning before the end of every month having an appropriate knowledge of the accruable revenue or the profit made from the revenue for the state. Multiples accounts scheme was also a dais for corrupt government officials to hide from government the true status of revenues in the State.

 So the propaganda by some section of the opposition that the State has been sold to Zenith bank is misinforming and deliberately aimed at inciting the people against the government.

 It is not true that Governor Udom Emmanuel has directed government ministries, departments, parastatals, agencies and commercial banks operating revenue accounts for the State to close all existing accounts hosting revenue for the State and allow Zenith bank alone collect revenue for Akwa Ibom State. 

The instruction is that all banks involved in the exercise to operate a single account in their coffers to grant the state total transparency in monitoring the revenues receive by the banks on behalf of the government. The Governor’s directive was meant to promote transparency and facilitate compliance with Sections 80 and 162 of the 1999 Constitution. 

In the same vein, President Muhammadu Buhari has also ordered all ministries, agencies and departments of government to immediately put a stop to the current arrangement in which they operate multiple bank accounts for the purpose of keeping revenues and incomes. He said henceforth, agencies of government must start paying revenue, income and other receipts into what he called a Treasury Single Account domiciled with the Central Bank of Nigeria. 

The FG wants all receipts due to the Federal Government or any of its agencies to be paid into TSA or designated accounts maintained and operated in the Central Bank of Nigeria. 

President Buhari has further explained that the presidential directive would end the previous public accounting situation of several fragmented accounts for government revenues, incomes and receipts. He said the existing system had been leading to loss or leakages of legitimate income meant for the Federation Account.

Despite the noise made by opposition party in Akwa Ibom State , apart from the national government of APC  approving the single account formula that was piloted by Governor Udom Emmanuel government, to show that it is the most transparent and productive scheme, Lagos State government have also approved the platforms According to a statement issued by the permanent secretary/accountant general of the state, Abimbola Umar, the state government took the decision to address the challenges previously faced with the operation of the multiple account system.

Governor Ambode said the operation of a Treasury Single Account (TSA) aside providing transparency and accountability will also encourage tax payers to request for a single account before making their payments. The development is in line with the objective of the move by the All Progressives Congress (APC) led federal government under President Muhammadu Buhari to ensure that all government revenue accrues to one consolidated account.

In addition, all the affected revenue collecting banks have been mandated to immediately close all the existing multiple revenue accounts domiciled in their banks to give room for a single revenue accounting system in line with the accountability and transparency policy of the current administration. 

Governor Udom Emmanuel is out to organise a good tax system in order to achieve various objectives in the development of the state. To do this, he must structure the tax collection system to adhere to a certain principle that will be transparent and accountable.

Adams Smith (1776) was basically concerned by the way in which economic could increase it productive capacity and thereby achieve a higher rate of economic growth. This is exactly why Mr Udom Emmanuel is restructuring the tax system in the State to enable the state gain higher growth for rapid development. So the section of people who are going about running down the polity should have a rethink as the scheme is not to out to paralyze other banks from collecting revenue for Akwa Ibom State Government but restricting hosting banks to operate a single account that will enable the ‘’pay direct’’ system to work and allow electronic alerts into government coffers as payment comes in.