Abuja, August 24, 2023 – The Federation Account Allocation Committee (FAAC) has disbursed a total sum of N966.110 billion as July’s Federation Account Revenue to the Federal Government, State Governments, and Local Councils. This significant allocation was confirmed in a communiqué released at the conclusion of the FAAC meeting on Tuesday in Abuja.
Chaired by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, the meeting disclosed a detailed breakdown of the distribution, shedding light on the various revenue streams that contributed to this substantial financial allocation. The allocation consisted of statutory revenue amounting to N397.419 billion, Value Added Tax (VAT) revenue totaling N271.947 billion, Electronic Money Transfer Levy (EMTL) revenue at N12.840 billion, and Exchange Difference revenue of N283.904 billion.
The cost of collection, an essential aspect of revenue management, was designated as N62.419 billion, reflecting the expenses incurred in gathering these revenues. Additionally, various deductions that encompass savings, transfers, refunds, and tax credit cancellations were accounted for, amounting to N717.962 billion.
A key factor in the nation’s financial landscape is the Excess Crude Account (ECA), which was reported to have a balance of $473,754.57. This strategic reserve plays a pivotal role in stabilizing the economy during periods of revenue fluctuations, ensuring a buffer against external economic shocks.
In line with the communiqué, the distribution of the N966.110 billion among the stakeholders transpired as follows: the Federal Government received N374.485 billion, State Governments obtained N310.670 billion, and Local Government Councils were allocated N229.409 billion. An additional sum of N51.545 billion was directed towards oil-producing states as 13% derivation revenue, an essential revenue source for states that contribute significantly to the nation’s oil production.
For the month of July, the gross statutory revenue registered a figure of N1.150 trillion. This figure, although slightly lower than June’s figure of N1.152 trillion by N2.497 billion, underscores the resilience of the revenue base in the face of changing economic dynamics. Divided amongst the various levels of government, the Federal Government received N190.489 billion from the N397.419 billion distributable statutory revenue. State Governments secured N96.619 billion, and Local Government Councils obtained N74.489 billion. Furthermore, N35.822 billion was distributed to the relevant states as 13% derivation revenue, bolstering the financial capacities of these regions.
July’s Value Added Tax (VAT) revenue saw an increase, with the gross revenue standing at N298.789 billion, marking an uptick of N5.378 billion compared to June 2023’s figure of N293.411 billion. This rise highlights the ongoing economic activity within the country. The distribution pattern of the N271.947 billion VAT revenue allotted N40.792 billion to the Federal Government, N135.974 billion to State Governments, and N95.181 billion to Local Government Councils.
The allocation of the N12.840 billion Electronic Money Transfer Levy (EMTL) was structured as follows: N1.926 billion for the Federal Government, N6.420 billion for State Governments, and N4.494 billion for Local Government Councils. This levy, aimed at harnessing the growing digital financial landscape, contributes to the revenue pool available for distribution.
Similarly, the Exchange Difference revenue of N283.904 billion was distributed among the stakeholders, with the Federal Government receiving N141.278 billion, State Governments obtaining N71.658 billion, and Local Government Councils securing N55.245 billion. Additionally, the sum of N15.723 billion was shared with the relevant states as 13 percent mineral revenue, reflecting the government’s commitment to equitable distribution across resource-rich areas.
The communiqué unveiled noteworthy trends in revenue streams, indicating that Import and Excise Duties, as well as Electronic Money Transfer Levy (EMTL), experienced significant increases, underscoring the evolving nature of the nation’s economic landscape. In contrast, Value Added Tax (VAT) witnessed a modest rise, reflecting consistent consumer spending habits. Conversely, Petroleum Profit Tax (PPT), Companies Income Tax (CIT), and Oil and Gas Royalties recorded substantial declines, potentially influenced by broader economic and industry-specific factors.