FAAC figure declined by N183.2bn in July

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AGF, Ahmed-Idris

The Federation Account Allocation Committee (FAAC) on Tuesday said the revenue accruing to the federation account from oil and non-oil sources recorded a decline of N183.26 billion from N570.58 billion received in the month of June to N387.31 billion in July.

FAAC made the disclosure in a communiqué issued at the end of its meeting in Abuja.

The Permanent Secretary, Federal Ministry of Finance, Mahmoud Dutse, read the communiqué, which was signed by the Accountant General of the Federation, Mr. Ahmed Idris.

The meeting, which was held at the headquarters of the Ministry of Finance, started at about 4pm and lasted up until about 8:09pm.

Dutse said the decline in revenue was caused by a drastic fall in revenue from Companies Income Tax due to the expiration of the deadline for filing tax returns.

He said while oil revenue recorded increases due to the rise in export sales for the federation by $62m, such could not be said of non-oil revenues.

The communiqué read in part, “The gross statutory revenue of N387.31bn received for the month was lower than the N570.58bn received in the previous month by N183.26bn.

“The increase in the average price of crude oil from $50.27 to $51.05 per barrel and a significant increase in export volume by 1.2 million barrels resulted in increased revenue from export sales for the federation by $62m.

“Despite the increases, there were issues of leaking flow lines, shut-ins and shutdowns at terminals for maintenance.

“There was a drastic fall in revenue from Companies Income Tax due to the expiration of deadline for filing returns.”

As a result of the drop in revenue, the allocation to the three tiers of government dropped by N184.35bn from N652.2bn in June to N467.85bn in July.

A breakdown of the allocation showed that the Federal Government received N193.04bn; states N130.69bn; local governments N98.01bn; while N31.59bn was given to the nine oil-producing states based on 13 per cent derivation principle.

Dutse put the balance in the Excess Crude Account at $2.3bn.

Reacting to the drop in allocation, the Chairman, Forum of Finance Commissioners, FAAC, Mahmud Yunusa, decried the drop in revenue, but added that the time had come for states to begin to look inwards to shore up revenue.

He said, “States will explore other options of revenue to depend less on revenue from the centre. We need to block leakages in revenue and come up with reforms to shore up revenue.

“We are also working on cost of running governance and any cost that is not necessary in running government needs to be reduced.”

He said reforms were currently being implemented in states to optimise the collection processes for revenue.

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