The Central Bank of Nigeria has outlined the benefits of electronic collection of revenues for the federal and state governments, saying it will reduce the cost of handling cash among other things.
The Director, Banking and Payment Systems, CBN, Mr. Dipo Fatokun, gave the benefits during a sensitisation workshop on e-collection organised by the central bank and banks in Lagos on Thursday.
He mentioned the reduced risk of cash-related crimes as one of the benefits of e-collection in a cashless society to the consumers.
Fatokun, however, noted that “the benefits derivable from the increased utilisation of e-payment channels cut across all spheres.”
For banks, he said e-collection would lead to enhanced profit and income line, reduced risk of cash-related attacks, and reduced cost of operations.
Corporations, he said, would also benefit from e-collection through faster access to capital, reduced revenue leakage, and reduced cash handling cost.
He said, “Consumers will enjoy increased convenience, cheaper access to banking services and access to credit, reduced overall cost of handling cash, and reduced risk of cash related crimes; while governments will enjoy firmer grip on monetary policy and its attendant effects on inflation and economic stability, among other things.”
The CBN director gave the examples of the success stories of e-collection as experienced by some state governments, saying “the Lagos State Government introduced the Lagos State Government Electronic Banking System of Revenue Cycle Management with the Direct Bank Lodgment System of the revenue collection process in 2002; Internally Generated Revenue grew annually at an average of six per cent; after the pilot of the cashless policy in 2012, IGR grew by 10 per cent.”
He further noted that the Ogun State Government had also introduced a cashless pilot scheme in 11 state-owned tertiary institutions in response to revenue leakages.
“At the end of first quarter in 2012, the government reported revenues of N2.5bn which is 195 per cent increase from reported revenue in quarter one of 2011 without an increase in fees,” he added.
Fatokun, however, listed the elements of a good e-collection system in a cashless society as its ability to allow other alternative modes of electronic payments such as the Automated Teller Machine, Internet transaction, Point of Sale transaction, mobile payments, electronic funds transfer, issuance of online electronic receipts such as air tickets, and the provision of online transaction tracking.
The Deputy Director, Revenue and Investment, Office of the Accountant-General of the Federation, Mr. Jarad Sosarumso, emphasised the need to plug loopholes in the federal government revenue collection system.
Outlining the reasons for the e-collection, Jarad said it would plug loopholes in the federal government’s revenue collection system, enthrone a new regime of transparent and accountable IGR management, improve available funds for funding developmental programmes, ease the burden of revenue payers and make government contracts more accessible to the people.
The Managing Director, SystemSpecs Limited, a local software company, Mr. John Obaro, applauded the federal government for involving an indigenous company in the project.
He said, “We have been on this for about two years now and we are happy that it has been a very successful story. We have done the e-payment site, now we have started the e-collection site. We have done the pilot in November 2014 and it was very successful.
“Essentially, what Remita does is to collect funds on behalf of government and put in a single account; this will block leakages. We have the Remita e-collection platform as a backroom engine that all funds accruing to government can come to a single account. Remita is open to any billing organisation such as state governments, local governments, banks, insurance companies, associations and so on”
Punch
