SAN FRANCISCO, January 20, (THEWILL) – Mahmoud Yunusa, Chairman, forum of finance commissioners in Nigeria, has declared that low federation revenue has become a blessing in disguise because states who used to depend on the revenue now think of improving their Internally Generated Revenue (IGR).
Mahmoud made this known as Kemi Adeosun, Minister of Finance, revealed that the Federation Account Allocation Committee (FAAC) shared N400 billion, as its December allocation, despite losing $65.4 million to oil vandals.
“Low federation revenue has become a blessing in disguise to us. Initially almost all the states relied heavily on FAAC,” he said.
“But now, because the money is no longer there, it has forced us to look inwards at the opportunities and potentials in our respective states and begin to explore them.
“We had to look at cutting cost in running governance and blocking all revenue leakages.”
Yunusa said most of the states have been able to improve their IGR through improved tax collection method and increased tax base.
Adeosun said the allocation was N13.1 billion more than what the three tiers of government shared as revenue for November 2016 saying the N400 billion was distributed under “four distributable sub-heads.”
They are statutory allocation where the sum of N224.88 billion was allocated; Value Added Tax N79.27 billion, exchange gain N52.84 billion and excess Petroleum Profit Tax N42.99 billion.
From the statutory allocations, the minister said after deducting cost of collections to the revenue generating agencies, the Federal Government got N105.76 billion, states N53.64 billion and local government councils N41.35 billion.
In addition, she said the sum of N15.5 billion was given to the oil producing states based on the 13 per cent derivation principle.
For VAT allocation, Adeosun said the federal government received N11.4 billion, states N38 billion while Local Government Councils got N26.63 billion.
Adeosun said that the federation generated N145.6 billion as mineral revenue and N103.1 billion as non-Mineral revenue.
The minister said the excess crude account now has a balance of $2.45 billion.
Adeosun said that the Force Majeure at Forcados, Qua Iboe and Brass terminals was still impacting negatively on revenue generation.
She added that there was revenue decline of 65.4 million dollars in oil export sales due to a drop in production volume of 1.39 million barrels.
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