SAT MARCH 01 2025-theGBJournal| Federation Accounts Allocation Committee (FAAC) disbursements to the three tiers of government in February (from the total revenue generated in January) increased by 19.5% m/m to NGN1.70 trillion (January: NGN1.42 trillion).
The increased was due to improved collections from Value Added Tax (VAT), Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Excise Duty, Import Duty and Customs External Tariff levies (CET) Levies and despite the decline in receipts from Electronic Money Transfer Levy (EMTL) and Oil & Gas Royalties.
Cordros Research estimates that the amount disbursed is 64.5% of the total gross revenue (NGN2.64 trillion) generated in the month, with the remaining balance allocated for transfer, intervention and refunds (NGN830.66 billion), and the cost of collection (NGN107.79 billion).
Based on the stipulated sharing revenue formula, the FGN received NGN552.59 billion (January: NG451.19 billion), State Governments received NGN590.64 billion (January: NG498.50 billion), the Local Governments received NGN434.57 billion (January: NGN361.75 billion), while oil producing states received additional NGN125.284 billion (January: NGN113.47 billion) as derivation (13% of mineral revenue).
”In the near term, we anticipate potential revenue improvements from two key areas: a potential increase in domestic oil production, and increased Company Income Tax (CIT) collections, driven by improving macroeconomic conditions.” says Cordros Research
However, the recent stability in the naira could lead to reduced exchange rate gains on foreign collections, which could tether the growth in overall FAAC disbursements.
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