FAAC distributes N493.828b July revenue

The Federal Account Allocation Committee (FAAC) has shared N493.828billion generated revenue for the month of July 2016 among the federal, states and local governments in Nigeria.

According to the figures released by Office of the Accountant General of the Federation, the gross statutory revenue including solid minerals is N275.102, while the net allocation is N258.151billion.

The gross value added tax is N66.987 billion and the total distributable revenue is N335.759 billion. The shared amount comprised the month’s statutory revenue of N258.151 billion, Value Added Tax (VAT) of N66.987 billion, exchange gain of N70.037 billion, exchange gain differential claim of N36.494 billion for the month of May 2016, additional distribution of N50.165 billion from excess PPT and N1.373 billion as excess bank charges recovered from 2008 to 2012.

There was also a N6.330 billion refund to the federal government by Nigerian National Petroleum Corporation (NNPC). Consequently, from Statutory revenue, federal government received N129.212 billion (52.68%); states received N65.538 billion (26.72%); local government councils received N50.527 billion (20.60%); while the oil producing states received N12.874 billion as 13% derivation revenue.

Furthermore, from the Revenue available from the VAT, federal government received N9.646 billion (15%); states received N32.154 billion (50%), while the local government’s received N22.508 billion (35%) and less 4 per cent cost of collection to Federal Inland Revenue Services (FIRS).

Also the N50.165 billion from the Excess Petroleum Profits Tax is to be shared among the three tiers of government according to the revenue allocation formula. The Communique from the FAAC sub-technical committee also explained that there was a decrease in the Volume of Crude oil export by 2.8 million barrels in April 2016 due to a subsisting Force Majeure at Forcadose Terminal. There was also a shut-in and shutdown of pipelines due to the activities of vandals as well as maintenance, which impacted negatively on production.

Presenting FAAC distribution report at the end of the meeting, the Permanent Secretary in the Ministry of Finance, Dr. Mahmoud Isa –Dutse, who represented the Minister of Finance explained that the revenue dipped because crude oil export decreased.

His words: “There was a revenue decrease of $102.17 million in Federation Export Revenue despite the increase in average price of crude oil from $38.64 to in March to $42.21 in April 2016. Import duty however recorded a marginal increase but the performances of companies income tax and petroleum profit tax declined drastically due to the fact that joint venture companies field their actual annual returns and made payments in the month of June while blue chip companies made their tax payments before the 30th of June 2016 deadline.”

He revealed that the sum of N106 billion was raised from the gains of the foreign exchange following the recent Central Bank of Nigeria (CBN) floating foreign exchange policy regime, where the United State has gained more value against the Naira. Of the amount, he said the sum of N70.037 billion was for the month of July, while balance of N36.494 billion was the arrears of  the exchange gain for May, which the National Economic Council (NEC) mandated the CBN to pay the Federation on the  recent rate instead of the old level.

Also, he announced that deposit money banks too were forced to refund to the Federation Account the sum of N1.373 billion being excess bank charges they made of deposit of federation revenue at their deposals. A breakdown of the revenue distributed indicate that the federal government got N192.212 billion from statutory revenue and N9.646 billion from VAT.

The nine oil producing States share a total of N 22.874 billion being 23 per cent of derivation . Meanwhile, Lagos which just joined the oil producing States is not yet qualified for share in the derivation principle until the return of minerals export proceeds which comes into the coffers three months from the date of exports.