FG, State, LGs Share N966bn of July FAAC Allocation, Nigeria’s Largest in 2023
- The sum of N966 billion shared between the three levels is the largest revenue shared this year
- The money includes revenue from gross statutory, VAT, fees on electronic money transfers, and exchange rate differences
- There were notable decreases in the petroleum profit tax, corporate income tax, and oil and gas royalties
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The three levels of government split N966.11 billion for July 2023, according to the Federation Account Allocation Committee.
The amount is the largest this year and marks a slight increase of N59.06 billion over the N907.05 billion shared for June 2023.
Bawa Mowa, Director, Press and Public Relations, Office of the Accountant General of the Federation, FAAC, made this disclosure in a communiqué released at the conclusion of its most recent meeting on Tuesday in Abuja.
Source: UGC
Legit.ng earlier reported that the Federation Account Allocation Committee (FAAC) revealed that the balance in Nigeria's Excess Crude Account (ECA) as at the end of June 2023 is $473,754.57.
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Wale Edun, the newly appointed Coordinating Minister of the Economy and Minister of Finance, served as the meeting's moderator according to Punch report.
Notably, Gross statutory revenue, VAT, fees on electronic money transfers, and revenue from exchange rate differences are all included in the total sum.
How revenue was distributed
The N966.11bn total distributable revenue comprised distributable statutory revenue of N397.42bn, distributable Value Added Tax revenue of N271.95bn, Electronic Money Transfer Levy revenue of N12.84bn and Exchange Difference revenue of N283.904bn.
The federal government received N374.49 billion, the state governments N310.67 billion, and the local government councils N229.41 billion from the total distributable revenue of N966.11 billion, according to a breakdown of how much each level of government received. A total of N51.55 billion was distributed to the concerned States as a 13% derivation revenue.
The statement further stated that gross statutory revenue of N1,150,42 billion was received for the month of July 2023, which was N2.5 billion less than the amount of N1,152,92 billion collected for the month of June 2023.
The Federal Government received N190.49 billion from the N397.42 billion distributable statutory revenue, followed by the State Governments with N96.62 billion and the Local Government Councils with N74.49 billion. The relevant States received N35.822 billion as 13 percent derivation revenue.
VAT revenue and electronic money transfer levy
Additionally, the gross VAT revenue available was N298.79 billion, which was N5.38 billion more than the N293.41 billion available in the month of June 2023.
Legit.ng earlier reported that the Federal Inland Revenue Service (FIRS), wealthy Nigerians and corporations understate their holdings, depriving the federal and state governments of tax revenues.
The Federal Government earned N40.79 billion, the State Governments N135.97 billion, and the Local Government Councils N95.18 billion from the VAT revenue.
Additionally, the Federal Government earned N1.93 billion, the State Governments N6.42 billion, and the Local Government Councils N4.49 billion from the N12.84 billion Electronic Money Transfer Levy.
The Federal Government earned N141.28 billion from the N283.9 billion Exchange Difference revenue, while the State Governments received N71.66 billion, Local Government Councils received N55.25 billion, and N15.72 billion was distributed to the appropriate States as 13% of the mineral revenue.
Commenting on the development, Olumide Adesina, a financial analyst noted that this could pave room for more focus on other sectors of the economy that require a lot of funding for development.
he said,
"It gives the government more room to spend on education, agriculture and infrastructure however might increase inflationary pressures amid the country's high money supply"
In his view, Samuel Oyekanmi, a financial analyst noted that Nigeria is heading towards a trillion naira which is not surprising because the government has been trying to block all the loopholes where revenue goes; majorly through subsidy removal and exchange rate.
He however advised the state governments not to rely on federal allocation as it is not sustaining. He said,
"I don't think it is sustaining because when you look at the numbers, states in Nigeria get over 50% of their revenue from federal allocation. They need to be self-sustainable because what if something happens and the oil revenue does not come in, then it means that's it for then.
Decrease in petroleum profit, others
The communiqué further stated that while Value Added Tax increased only slightly, Import and Excise Duties and the Electronic Money Transfer Levy both climbed significantly.
However, there were notable decreases in the petroleum profit tax, corporate income tax, and oil and gas royalties.
It was also revealed that N717.96bn was removed for savings, transfers, refunds, and the cancellation of tax credits, while N62.42bn was deducted as the cost of collection.
The Excess Crude Account was left with a balance of $473,754.57.
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Ten commercial banks operating in the country have contributed over N155 billion in income tax payments to the coffers of the Federal Government of Nigeria for 2022, according to Legit.ng earlier report.
The amount marks a significant increase of 33.50% from the N116.54 billion paid by the banks during the previous fiscal year, as reported by their financial statements submitted to the Nigerian exchange.
Source: Legit.ng
