• Federal government receives N424.87 billion
- VAT revenue hits N543.52 billion
- Oil and gas royalty, EMTL record significant increases
Tayo Busayo, Abuja
In a significant disbursement from the Federation Accounts Allocation Committee (FAAC), the Federal Government, state governments, and local government councils have collectively shared a total revenue of N1.298 trillion for September 2024. The distribution was announced following the FAAC meeting held in October 2024 in Abuja.
The Office of the Accountant General of the Federation, in a statement signed by Bawa Mokwa, Director of Press and Public Affairs, outlined the sources of the distributable revenue, which included N124.716 billion from statutory revenue, N543.518 billion from Value Added Tax (VAT), N18.445 billion from the Electronic Money Transfer Levy (EMTL), N462.191 billion from exchange difference revenue, and an augmentation of N150 billion.
The communiqué issued by FAAC indicated that the gross revenue available for the month of September 2024 amounted to N2.258 trillion. However, N80.993 billion was deducted for the cost of collection, while N878.946 billion went toward transfers, interventions, and refunds.
A breakdown of the revenue components showed that gross statutory revenue for September 2024 stood at N1.043 trillion, a decline of N177.426 billion from the N1.221 trillion recorded in August 2024. In contrast, VAT revenue saw an increase, with N583.675 billion collected in September, compared to N573.341 billion in August, reflecting a rise of N10.334 billion.
Revenue Distribution Breakdown
Out of the N1.298 trillion total distributable revenue, the Federal Government received N424.867 billion, state governments were allocated N453.724 billion, and local government councils shared N329.864 billion. Additionally, N90.415 billion (representing 13% of mineral revenue) was distributed to states benefiting from derivation funds.
Further details from the communiqué revealed that the N124.716 billion statutory revenue distribution was shared as follows:
- Federal Government: N43.037 billion
- State Governments: N21.829 billion
- Local Governments: N16.829 billion
- Derivation Fund (13% of mineral revenue): N43.021 billion
For the N543.518 billion distributable VAT revenue, the Federal Government received N81.528 billion, state governments N271.759 billion, and local governments N190.231 billion.
Revenue from the N18.445 billion Electronic Money Transfer Levy (EMTL) was also shared, with the Federal Government receiving N2.767 billion, state governments N9.222 billion, and local governments N6.456 billion.
The N462.191 billion exchange difference revenue was allocated as follows:
- Federal Government: N218.515 billion
- State Governments: N110.834 billion
- Local Governments: N85.448 billion
- Derivation Fund: N47.394 billion
The N150 billion augmentation saw the Federal Government taking N79.020 billion, the state governments N40.080 billion, and the local governments N30.900 billion.
Revenue Performance and Sector Highlights
The FAAC report noted significant increases in revenue from oil and gas royalties, excise duty, and the Electronic Money Transfer Levy (EMTL). VAT and import duty also witnessed marginal increases. However, there were substantial declines in Petroleum Profit Tax (PPT), Companies Income Tax (CIT), and other sources of revenue.
This allocation underscores the Federal Government’s continued reliance on oil revenue while grappling with fluctuations in other revenue streams, particularly corporate taxes. The September 2024 revenue distribution is expected to provide much-needed support for the three tiers of government as they navigate economic challenges.
Impact of Revenue Sharing
The distributed revenue is critical for both the federal and sub-national governments as it funds various sectors, including education, healthcare, infrastructure, and salaries for civil servants. The timely distribution also aids in addressing ongoing economic challenges, particularly as inflation continues to strain household incomes.
With the largest share going to the Federal Government, the allocated funds will play a significant role in federal projects and administrative costs. For state and local governments, the revenue is a lifeline for sustaining grassroots development and providing essential services.
The increase in VAT and other levies demonstrates the government’s efforts to diversify its revenue sources and reduce reliance on petroleum income, especially with the fluctuating global oil market. However, the government’s capacity to generate non-oil revenues remains a focal point for economic policy discussions.
As the government continues to face revenue challenges, stakeholders anticipate further reforms in the tax system, public expenditure, and revenue management to ensure sustainable growth for the nation's economy.