Tuesday, 22 August 2017

Federal Account revenue drops to N387.31bn for July

Federal Account revenue drops to N387.31bn for July

The three tiers of government got a rude shock on Tuesday evening when they were told that revenue accruing into the Federation Account from oil and non-oil sources recorded a decline of N183.26 billion from N570.58 billionn received in the month of June to N387.31 billion in July.

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

Permanent Secretary , Ministry of finance, Dr. Mahmoud Isa Dutse confirmed the amount yesterday at the close of the minthly Federation Account Allocation Committee (FAAC) meeting. The amount shared comprised Value Added Tax( VAT), Company Income Tax (CIT) and Petroleum Profit Tax( PPT).

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 noted that while oil revenue recorded increases due to rise in export sales for the federation by $62 million, the same could not be said of non-oil revenues.

According to Dutse, “though the month under consideration recorded increase in average Price of crude oil from $50.27 to $51.05 per barrel and significant increase in export volume by 1.20 million barrels, resulting in increase revenue from export sales for federation by $62 million, the amount shared reduced drastically.”

A breakdown of the total allocations for July showed that the Federal Government received N193.04 billion, states N130.69 billion, local governments N98.01 billion while N31.59 billion was given to the nine oil producing states as 13 per cent derivation.

Reacting to the drop in allocation, the Chairman, Forum of Finance Commissioners, Mahmud Yunusa lamented the drop in revenue, he however warned that “time had come for states to start looking inwards to shore up revenue. 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 needed to be reduced.”

The balance in excess crude account is put at $2.3 billion.

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