By Nafisat Makinde
The Federation Account Allocation Committee (FAAC) has shared a total sum of N1.681 trillion from the April 2025 Federation Account Revenue to the Federal Government, States, and Local Government Councils. This allocation was made at the May 2025 FAAC meeting held in Abuja.
Revenue Breakdown:
- Total Distributable Revenue: N1.681 trillion
- Statutory Revenue: N962.882 billion
- Value Added Tax (VAT) Revenue: N598.077 billion
- Electronic Money Transfer Levy (EMTL) Revenue: N38.862 billion
- Exchange Difference: N81.407 billion
Allocation to Each Tier of Government:
- Federal Government: N565.307 billion
- Statutory Revenue: N431.307 billion
- VAT: N89.712 billion
- EMTL: N5.829 billion
- Exchange Difference: N38.459 billion
- State Governments: N556.741 billion
- Statutory Revenue: N218.765 billion
- VAT: N299.039 billion
- EMTL: N19.431 billion
- Exchange Difference: N19.507 billion
- Derivation Revenue: N152.553 billion (13% of mineral revenue)
- Local Government Councils: N406.627 billion
- Statutory Revenue: N168.659 billion
- VAT: N209.327 billion
- EMTL: N13.602 billion
- Exchange Difference: N15.039 billion
Gross Revenue and Deductions:
- Total Gross Revenue: N2.848 trillion (April 2025)
- Deductions:
- Cost of Revenue Collection: N101.051 billion
- Statutory Transfers, Refunds, Interventions, and Savings: N1.066 trillion
Revenue Performance:
- Gross Statutory Revenue: N2.084 trillion (April 2025), an increase of N365.595 billion from March 2025
- Gross VAT Revenue: N642.265 billion (April 2025), an increase of N4.647 billion from March 2025
Revenue Streams:
- Petroleum Profit Tax (PPT), Oil and Gas Royalty, EMTL, VAT, Excise Duty, Import Duty, and CET Levies: Increased significantly in April 2025
- Companies Income Tax (CIT): Decreased considerably in April 2025
Derivation Revenue:
- Total Derivation Revenue: N152.553 billion (13% of mineral revenue)
- Statutory Revenue: N144.151 billion
- Exchange Difference: N8.402 billion
Revenue Sharing:
The FAAC’s allocation of N1.681 trillion to the three tiers of government is expected to boost economic activities and development across the country. The revenue sharing formula ensures that each tier of government receives a fair share of the revenue, enabling them to meet their financial obligations and deliver essential services to citizens.
Implications:
The significant increase in statutory revenue and VAT revenue is expected to have a positive impact on the economy. However, the decrease in Companies Income Tax (CIT) may require further analysis to understand the underlying causes and potential implications for the economy.
Conclusion:
The FAAC’s disbursement of N1.681 trillion to the Federal Government, States, and Local Government Councils is a significant development that highlights the importance of effective revenue management and allocation. The revenue sharing formula ensures that each tier of government receives a fair share of the revenue, enabling them to deliver essential services and drive economic growth.
