Business & Economy - News - Oil & Gas - October 28, 2021

Federal, States, LGs share N739.97 billion for September 2021

MEDIATRACNET
After the initial stalemate, the Federation Accounts Allocation Committee (FAAC) on Thursday agreed to share a total of N739.965 billion for September 2021 between the Federal, States and Local Governments Councils.

On Friday, members of the FAAC, consisting of Commissioners of Finance and Accountants General of the various States and the Federal Capital Territory, disagreed with the Accountant General of the Federation and the Minister of Finance over their decision to deduct $418m Paris Club refunds from states and local governments’ accounts.

The representatives of the various states said the decision to effect the deductions must be suspended until pending the determination of court cases on the issue.

The federal and state government representatives agreed on Wednesday to suspend the planned deductions till further notice.

The Ekiti State Commissioner for Finance, Akin Oyebode, confirmed the issue was resolved.

Consequently, the Committee resolved to share a total of N739.965 billion among the three tiers of government for September 2021.

Details contained in the communiqué issued at the end of the virtual meeting of the Committee showed the N739.965 billion was the total Distributable Revenue, comprising Statutory Revenue of N577.765 billion, Value Added Tax (VAT) revenue of N159.096 billion and Exchange Gain of N3.104 billion.’

In September 2021, about N126.272 billion deductions for cost of collection, statutory transfers, savings and refunds. The balance in the Excess Crude Account (ECA) was $60.860 million.

The communiqué confirmed that out of the total Distributable Revenue of N739.965 billion, the Federal Government received N301.311 billion, the State Governments N220.272 billion, and the Local Government Councils N164.176 billion, while about N54.206 billion was shared to the relevant States as 13% derivation revenue.

The distributable Statutory Revenue of N577.765 billion was available for the month. From this amount, the Federal Government received N276.008 billion, the State Governments received N139.995 billion and the Local Government Councils received N107.930 billion.

The sum of N53.831billion was given to the relevant States as 13% derivation revenue.

In September 2021, the gross revenue available from the Value Added Tax (VAT) was N170.850 billion. This was lower than the N178.509 billion available in the month of August by N7.659billion.

About N4.920 billion allocation to North East Development Commission (NEDC) and N6.834 billion cost of revenue collection were deducted from the N170.850 billion gross Value Added Tax (VAT) revenue, resulting in the distributable Value Added Tax (VAT) revenue of N159.096billion.

From the N159.096billion distributable Value Added Tax (VAT) revenue, the Federal Government received N23.864 billion, the State Governments received N79.548 billion and the Local Government Councils received N55.684 billion.

The Federal Government received N1.438 billion from the Exchange Gain revenue of N3.104 billion. The State Governments N0.729 billion, the Local Government Councils N0.562 billion and N0.375 billion was shared to the relevant States as 13% derivation revenue.

The communiqué, in the month of September 2021, Petroleum Profit Tax (PPT), Oil and Gas Royalties and Excise Duty increased significantly while Companies Income Tax (CIT), Value Added Tax (VAT) and Import Duty decreased marginally.

There were reports that some consultants, who claimed a percentage of the refunds as payment for services they said they rendered to the states and local governments, went to court to demand their pay.

The Federal Government had negotiated an out-of-court settlement with the contractors and $418m was agreed on as the judgment debt.

But the Nigeria Governors’ Forum, which opposed the payment, approached the court to stop the implementation of the controversial agreement.

The Chairman of the Forum of Commissioners of Finance and Benue State Commissioner for Finance, David Olofu, said the sharing of the October revenue by the three tiers of government was suspended last Friday because of the deductions.

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