Accountant General of the Federation (AGF), Ahmed Idris has announced the rise in Federation Account Allocation gross revenues to N676.41 billion in July from N653.35 billion in June this year, saying that it is due to higher crude oil sales and tax receipts.
The Accountant General, in a virtual meeting of Federation Account Allocation Committee (FAAC), said that the price of oil, Nigeria’s main export, fell sharply early this year as the coronavirus outbreak hit demand, cutting government revenues, weakening the Naira and creating a large financing gap for the country.
Ahmed Idris said that oil revenues with sales tax increased in July, while corporate taxes and import duty decreased, adding that the balance on oil surplus savings account stood at $72.41 million as at August 19 while income from crude sales and value added tax (VAT) made up the bulk of the government’s gross revenues.
The Federation Accounts Allocation Committee (FAAC) at its virtual meeting chaired by the Permanent Secretary, Federal Ministry of Finance, Budget and National Planning, Dr. Mahmoud Isa- Dutse, shared to the three tiers of government, a total sum of N676.407 billion as federation allocation for the month of July, 2020.
From this amount, inclusive of VAT, the Federal Government received N273.189 billion, the States received N190.849 billion, the Local Government councils got N142.761billion, while the oil producing states received N42.851 billion as derivation (13% of Mineral Revenue) and Cost of Collection/Transfer and Refund got N26.757 billion.
The communique issued by the Federation Account Allocation Committee (FAAC) at the end of the meeting, indicated that the Gross Revenue available from the Value Added Tax (VAT) for July, 2020 was N132.619 billion against N128.619 billion distributed in the preceding month of June, 2020, resulting in an increase of N3.793 billion.
The distribution is as follows; Federal Government got N18.500 billion, the States received N61.668 billion, Local Government Councils got N43.168 billon, while Cost of Collection/Transfer and Refund got N9.283 billion. The distributed Statutory Revenue of N543.788 billion received for the month was higher than the N524.526 billion received for the previous month by N19.262 billion, which the Federal government received N254.688 billon, States got N129.181 billion, LGCs got N99.593 billion, Derivation (13% Mineral Revenue) got N42.851 billion and Cost of Collection/ Transfer and Refund got N17.474 billion.
The communique also revealed that Oil and Gas Royalty, Petroleum Profit Tax (PPT), and Value Added Tax (VAT) increased considerably, while Companies Income Tax (CIT), Import and Excise Duty recorded decreases. The total revenue distributable for the current month including Value Added Tax (VAT), according to the committee is N676.407 billion.
The government said oil revenues with sales tax increased in July, while corporate taxes and import duty decreased. The government also said the balance on its oil surplus savings account stood at $72.41 million as at Aug. 19. Income from crude sales and value added tax (VAT) made up the bulk of the government’s gross revenues.
Companies in Nigeria have seen profits slump especially in the second quarter when the government imposed a lockdown to slow the spread of the virus. Also, restrictions on international travel and dollar shortages have hurt imports.
In February, Nigeria increased VAT to 7.5% from 5% to boost revenues, seen among the lowest in the world. Lower government revenues could worsen Nigeria’s debt to revenue ratio this year.