Key points
- FAAC distributed N2.55 trillion to the Federal Government, states and local government councils for June.
- The allocation comprised N1.81 trillion in statutory revenue and N740.72 billion from VAT.
- Gross revenue rose to N4.5 trillion in June, driven by higher statutory revenue and VAT collections.
- Company Income Tax, petroleum royalties, VAT and import-related revenues recorded significant increases.
Main story
The Federation Account Allocation Committee (FAAC) has distributed N2.55 trillion to the Federal Government, the 36 state governments and the 774 local government councils as revenue allocation for June.
The amount, approved at the committee’s July meeting, was drawn from N1.809 trillion in statutory revenue and N740.724 billion generated from Value Added Tax (VAT).
According to the Office of the Accountant-General of the Federation, total gross revenue available for the month stood at N4.5 trillion. After deductions of N160.744 billion for collection costs and N1.789 trillion for transfers and refunds, the balance was shared among the three tiers of government.
The Federal Government received N923.438 billion from the distributable pool, while state governments received N838.208 billion. Local government councils were allocated N591.39 billion, with oil-producing states receiving an additional N197.61 billion as 13 per cent derivation revenue.
From the statutory revenue component, the Federal Government received N849.366 billion, states received N430.81 billion, while local governments got N332.136 billion. The derivation allocation to eligible states remained N197.61 billion.
The VAT distribution saw the Federal Government receive N74.072 billion, state governments N407.398 billion and local governments N259.253 billion.
FAAC also reported stronger revenue performance during the month, with Company Income Tax, Capital Gains Tax, Stamp Duties, petroleum royalties, gas flare revenues, rents, VAT, import duties and CET levies recording notable increases. However, Petroleum Profit Tax, Hydrocarbon Tax, mineral royalties and related fees declined, while excise duty posted only marginal growth.
The issues
Monthly FAAC allocations remain a major source of funding for governments at all levels. Changes in federally collected revenue directly affect public spending, infrastructure projects, salaries and fiscal stability, particularly for states and local governments that rely heavily on statutory allocations.
What’s being said
“The Federal Government received N923.438 billion, the state governments received N838.208 billion, while the local government councils received N591.390 billion.” — FAAC communiqué
What’s next
Governments are expected to apply the June allocation toward budget implementation, while attention will remain on revenue performance in the second half of the year amid ongoing fiscal and economic reforms.
Bottom line
Higher statutory revenue and VAT collections lifted June’s FAAC distribution to N2.55 trillion, providing increased fiscal resources for the three tiers of government despite declines in some oil-related tax revenues.
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