FG bans MDAs from doing business with unregistered firms

Nigeria economy. PHOTO: buzznigeria.com

The Federal Government may have made good its threats to sever ties with organisations that do not add economic value to its efforts to raise the country’s revenue profile, as it unveiled a new set of rules to that effect yesterday.

It officially ordered Ministries, Departments and Agencies (MDAs) to stop transactions with companies and other corporate bodies that are not duly registered by the Corporate Affairs Commission (CAC).

The measure is aimed at protecting MDAs from entering contractual obligations with fake or unregistered companies, even as the Minister of Finance, Kemi Adeosun warned that payments for contracts by companies that did not comply with the requirements may not be considered.

The move may also be part of strategies to enlist more eligible and taxable entities into government’s the tax net just as Adeosun said it was disheartening that only about 13 million people pay tax out of 180 million, with about 12.5 million being deductions at source, while a paltry 500,000 comply voluntarily.

“Our new strategy is to raise it to the level of ‘no payment’ for contractors without evidence of tax payment. It will get to using tax payment to obtain services both in government and the private sector,” she said.

The Director of Information, Ministry of Finance, Salisu Na’Inna Dambatta who made the disclosure, cited a circular issued by the Office of the Secretary to the Government of the Federation.

The development means that for companies and other corporate bodies to qualify for business transactions with the MDAs, their letterhead must bear the Registration Number (RC) as issued by CAC.



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