Business - Business & Economy - News - November 18, 2021

Amid growing declines in key revenue streams, FAAC shares N671.91 bn for October 2021

FAAC said Petroleum Profit Tax (PPT), Oil and Gas Royalties and Companies Income Tax (CIT) recorded considerable declines in October 2021.


By Bassey Udo

The three tiers of government, namely federal, states and local councils, received statutory allocations from the Federation Accounts for October 2021 totalling about N671.910 billion.

The Federation Accounts Allocation Committee (FAAC) disclosed this on Wednesday at the end of its virtual meeting to share the revenues for the month.

The committee, which has the Minister of Finance, Budget and National Planning as Chairman, also has the Accountant-General of the Federation as head of its Secretariat.

Other members include Accountants-General and Commissioners of Finance of all the 36 States and head of the Accounts units in the 774 local councils as well as Federal Capital Territory, Abuja.

Details of the distribution of the revenues contained in the 8communiqué issued by the Accountant-General of the Federation, Ahmed Idris, at the end of the Committee meeting for November, 2021 held in Lagos State showed the total distributable revenue shared for the month was lower than the figure shared in the previous month by about N68.055 billion.

In September 2021, the three tiers of the government shared a total of N739.965 billion.

The committee attributed the drop in the overall revenues realised to the poor performances by the Petroleum Profit Tax (PPT), Oil and Gas Royalties and Companies Income Tax (CIT), which recorded considerable decreases.

The committee also reported a slight decline in the Value Added Tax (VAT) during the month, with Import Duty and Excise Duty the areas that registered marginal increases.

Regardless, Idris said the distributable statutory revenue of N363.849 billion was lower than the corresponding figure of N577.765 billion in September 2021; same as the distributable Value Added Tax (VAT) revenue, which also showed a decrease from N159.096 billion in September to N154.844 billion,

The gain realized from exchange rate of the Naira against other international currencies like the dollars was higher, about N3.217 billion against N3.104 billion in September.

The Federal Government received about N1.495 billion from the total N3.217 billion, while the State Governments got N0.758 billion, the Local Government Councils N0.584 billion and N0.380 billion shared to the relevant States as 13 percenr derivation revenue.

The committee reported that about N150 billion realized from the non-mineral revenue as augmentation to the total revenue was also shared.

From the amount, the committee said the Federal Government received N79.020 billion, the State Governments N40.080 billion and the Local Government Councils N30.900 billion.

A breakdown of the cost component of the report showed that about N24.591 billion was deducted as cost of collection by the three revenue collecting agencies, namely the Federal Inland Revenue Service (FIRS), Inspectorate department of the Nigerian Upstream Regulatory Commission, and the Nigeria Customs Service.

Also, about N30.864 billion was recorded as total deduction for statutory transfers, savings and refunds, with the balance in the Excess Crude Oil Revenue Account (ECA) at about $60.860 million.

Out of the total distributable revenue, the committee said the Federal Government received N284.292 billion, the 36 States N209.838 billion, and the Local Government Councils N156.282 billion, while about N21.498 billion was shared to the relevant oil producing States as 13 percent derivation revenue.

The sharing of the statutory revenue of N363.849 billion available for distribution for the month showed the Federal Government received N180.551 billion, the State Governments N91.578 billion and the Local Government Councils N70.603 billion, with about N21.118 billion shared as 13 percent derivation revenue to the oil producing states.

In terms of the gross revenue from Value Added Tax (VAT) collection, the committee said about N166.284 billion was realised.

Out of the total N166.284 billion gross Value Added Tax (VAT) revenue, the committee said about N6.651 billion was deducted by the three revenue collecting agencies as cost of revenue collection, leaving the distributable VAT revenue at about N154.844 billion.

From the N154.844 billion distributable VAT revenue, the committee said the Federal Government received N23.227 billion, the State Governments N77.422 billion and the Local Government Councils N54.195 billion.

The amount, the committee said, was lower than about N170.850 billion realised in September 2021 by about N4.566 billion.

In addition, the committee said about N4.789 billion was allocated to the North East Development Commission (NEDC).

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