Federal Accounts Allocation Committee (FAAC) allocations for the month of August 2017 show a marked appreciation compared to the preceding month. Revenue shared in July was N467.8 billion, a 45% percent increase. Figures from the FAAC allocation for the August show the three tiers of government shared a total of N637.7 billion. According to the Account General of the Federation, Ahmed Idris the key driver of the increased revenue was non oil income.
The Federal Government received N273.1 billion; the states N173.9 billion and Local Governments N131.044 billion. The oil producing states received N41.98 billion as 13 per cent derivation revenue. FAAC is a committee comprising representatives of the Federal, State and Local Governments. The committee meets once a month to share revenue for all tiers.
Why non oil revenue increased
Government is largely dependent on crude oil earnings for revenue. Crude oil prices and production volumes dropped last year leading to Nigeria’s economy going into a recession. Crude prices have since rebounded, and militant attacks have largely reduced leading to production hitting 1.8 million barrels per day. In response, the government has tightened leakages in the system, and enhanced tax collection.
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Vice President Yemi Osinbajo in June signed the Voluntary Asset Income Declaration Scheme (VAIDS). Under the scheme, individuals and companies that were hitherto not paying tax have been given an amnesty period till July 2018 to settle all outstanding liabilities. The Scheme commenced on July 1st 2017, and will last for 9 months. Enforcement will be by both the Federal Inland Revenue Service (FIRS) and State tax boards. Government has also signed treaties with several foreign governments that will provide data on Nigerian citizens.