FG, states, LGs share record N2.26t4n revenue as tax, royalty collections rise

The federal, state and local governments shared a record N2.257 trillion in April revenue, buoyed by higher collections from company income taxes, value-added tax and oil and gas royalties, according to the Federation Account Allocation Committee (FAAC).

The revenue was distributed at the committee’s May meeting in Abuja, based on collections paid into the federation account in April, the Office of the Accountant General of the Federation (OAGF) said in a statement.

The total distributable revenue consisted of N1.260 trillion in statutory revenue, N747.088 billion in value-added tax receipts and a N250 billion augmentation.

The latest allocation marks one of the highest monthly distributions since President Bola Tinubu’s administration launched sweeping fiscal and foreign-exchange reforms aimed at boosting government revenue and strengthening public finances.

A communiqué issued after the meeting showed total gross revenue available in April rose to N3.184 trillion. Deductions for collection costs amounted to N113.756 billion, while transfers, refunds and savings totaled N813.839 billion, leaving N2.257 trillion available for distribution among the three tiers of government.

Gross statutory revenue increased sharply to N2.378 trillion in April from N1.699 trillion in March, representing a rise of N678.224 billion.

Gross value-added tax revenue also climbed to N806.617 billion from N664.425 billion a month earlier, an increase of N142.192 billion.

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Under the sharing formula, the federal government received N787.351 billion from the distributable pool, while the 36 state governments received a combined N772.360 billion. Local government councils received N540.152 billion.

Oil-producing states also received N157.254 billion as derivation revenue, representing 13% of mineral-related earnings allocated to states where natural resources are produced.

From the N1.260 trillion statutory revenue component, the federal government received N580.942 billion, states received N294.661 billion and local governments got N227.172 billion. The derivation allocation of N157.254 billion was distributed separately to eligible states.

The N747.088 billion distributable VAT revenue was shared with the federal government receiving N74.709 billion, states N410.898 billion and local governments N261.481 billion.

The federal government also received N131.700 billion from the N250 billion augmentation, while states got N66.800 billion and local governments received N51.500 billion.

The increase in revenue collections was driven largely by stronger receipts from company income tax, capital gains tax, stamp duties, import duties, oil and gas royalties and value-added tax, according to the communiqué.

The committee said petroleum profit tax and hydrocarbon tax collections declined significantly during the period, reflecting continued shifts in Nigeria’s oil tax structure following the implementation of the Petroleum Industry Act.

Excise duties and Common External Tariff levies recorded marginal declines.

The latest revenue figures highlight the growing contribution of non-oil taxes to government finances as authorities seek to broaden the tax base and reduce reliance on crude oil earnings.

Higher collections from company taxes and VAT have increasingly offset volatility in oil-related revenues, which remain vulnerable to fluctuations in production levels and global energy prices.

The FAAC allocation is closely watched by subnational governments because monthly distributions from the federation account constitute the primary source of funding for most states and local councils, many of which generate limited internally generated revenue.

Rising allocations have provided additional fiscal space for governments grappling with higher wage bills, infrastructure spending needs and inflation-driven expenditure pressures.

Despite the increase in revenue distributions, many Nigerians have yet to feel the benefits as inflation and elevated living costs continue to erode household purchasing power, a challenge highlighted by the International Monetary Fund (IMF) in its recent assessment of the country’s economy.