For the first time in the 2016 fiscal year, the monthly allocation from the Federation Account crossed the N500bn threshold with the Federation Accounts Allocation Committee distributing a total sum of N559.03bn to the three tiers of government on Thursday.
This is even as the gross revenue accruing to the federation increased by N301.32bn, the highest in a long time.
Addressing journalists shortly after the FAAC meeting, which was held at the headquarters of the Ministry of Finance in Abuja, the Minister of Finance, Mrs. Kemi Adeosun, attributed the increase in revenue to efficiency in collection by the revenue generating agencies.
Specifically, she said there was an increase in non-oil tax collection by the Federal Inland Revenue Service, as the agency recorded an increase of N165bn in tax collections, while the Nigeria Customs Service raised its revenue by N12.6bn
Adeosun said, “The big cause of the increase is the improvement of non-oil revenue from the FIRS. The FIRS improved its performance between last month and this month by N165bn. And that accounted for the change in revenue; and also, there was an improvement of N12.6bn by the Nigeria Customs Service, as well as the exchange rate gain of N79.2bn
“This is a significant improved performance, especially by the Customs that was able to do so despite the scarcity of foreign exchange and the restrictions on the 41 items. So, we are quite encouraged by that because it means that some of the reforms that we have started around collection improvement are beginning to bear fruit.”
This increase in revenue, according to her, led to an improvement in the amount allocated to the three tiers of government from N305.12bn in May to N559.03bn for the month of June.
Giving a breakdown of the amount shared, the minister said:
N412.3bn was distributed under statutory allocation;
N67.4bn under Value Added Tax revenue;
the balance of N79.27bn was allocated from the gain made from exchange rate differentials.
Out of the N412.3bn shared under statutory allocation, Adeosun said that after deducting the costs of collection to the Customs and the FIRS, the Federal Government received N199.75bn; the states, N101.3bn; local governments, N78.11bn; while the sum of N17.12bn was shared to oil producing states based on the derivation principle.
For VAT, she said Federal Government received N9.7bn; states, N32.35bn; and local governments, N22.67bn.
The minister said, “The gross statutory revenue of N538.78bn received was higher than the N237.46bn received in the previous month by N301.32bn. The average price of crude oil increases from $32.26 in February to $38.64 in March, resulting in $92.99m increase in federation export revenue.”
“There was an outstanding increase in Companies Income Tax and Petroluem Profit Tax with complementary increases in import duty and royalties.”
Adeosun put the balance in the Excess Crude Account at 3.94 billion dollars as at July 20, indicating an increase of 1.68 billion dollars over the the 2.26 billion dollars in the previous month.
When asked about plans to stimulate the economy away from the looming recession, the minister said that there was no need for panic as the fundamentals of the economy were still strong.
Meanwhile the Chairman, Commissioners of Finance Forum, Mr John Inegbedion, said with the improved revenue for the month, all 36 states would be able to pay salaries for the month.
Also, the Commissioner of Finance, Cross River, Mr Asuquo Ekpenyong, said the state would start processing May and June salaries for payment.
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