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No more annual allocations to DPR

By on October 28, 2014

President Goodluck Jonathan has approved the retention of four per cent of royalties on oil and gas concessions and other revenues as the cost of collection by the Department of Petroleum Resources, investigation has shown.

This means that the agency will retain four per cent of the total revenue it collects on behalf of the Federal Government and the other two tiers of government every month rather than depend on budgetary provisions for its operations.

The DPR is empowered by the Petroleum Act of 1969 as amended to collect royalties on producing concessions on behalf of the Federal Government.

The money so collected is paid into a designated royalty account with the Central Bank of Nigeria and credited to the Federation Account on monthly basis.

By the approval, the DPR will no longer feature in the Federal Government budgeting process as its operations will now be funded from the four per cent of the revenues it has been permitted to retain.

Investigation revealed that the Minister of State for Finance, Mr. Bashir Yuguda, recently wrote a memo to the President on the need to grant cost retention to the DPR as another agency that collects revenues for the government.

Following the memo, the President granted the approval that set the DPR at par with the Federal Inland Revenue Service and the Nigerian Customs Service.

Yuguda was said to have broken the news to members of the Commissioners of Finance Forum who met in Abuja last week.

Our correspondent learnt that the minister justified the approval on the need to treat the DPR as the other revenue collecting agencies instead of allowing it to remain on the budgeting system.

The FIRS receives four per cent of the revenue it collects as the incurred cost. In the month of September, for instance, the service retained N5.84bn from Value Added Tax, Company Income Tax, Personal Income Tax and other taxes collected for the government.

The Nigeria Customs Service, on the other hand, receives seven per cent as cost of collection. In the month of September, it retained N3.63bn as the cost of the revenue it collected on behalf of the federation.

In the 2014 budget, the DPR was allocated N31.39bn for personnel; N852.03m for overhead and N2.27bn for capital projects, giving a total of N34.51bn.

Under the new dispensation, which is likely to start in the 2015 fiscal year, these costs will be taken care of from the four per cent approved for the agency by the President.

 

 

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