The Federation Accounts Allocation Committee of Nigeria (FAAC) has reported a sharp decline in Value Added Tax (VAT) revenue, with collections falling by ₦117.43 billion from ₦771.886 billion in January to ₦654.456 billion in February 2025.
This revenue shortfall, along with declines in Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Excise Duty, Import Duty, and CET Levies, impacted the total distributable revenue to federal, state, and local governments.
According to a communiqué released after FAAC’s March meeting in Abuja, the gross statutory revenue of ₦1.653 trillion shared during the meeting was lower than January’s ₦1.848 trillion by ₦194.664 billion. The total revenue distributed among the three government tiers stood at ₦1.678 trillion, comprising ₦827.633 billion in statutory revenue, ₦609.430 billion from VAT, ₦35.171 billion from the Electronic Money Transfer Levy (EMTL), ₦28.218 billion from solid minerals, and an augmentation of ₦178 billion.
FAAC, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had in attendance the newly appointed Accountant General of the Federation, Shamseldeen Ogunjimi.
Breakdown of the distribution shows that the Federal Government received ₦569.656 billion, state governments got ₦562.195 billion, and local governments received ₦410.559 billion. Additionally, ₦136.042 billion (13% of mineral revenue) was allocated to oil-producing states as derivation revenue.
From the ₦827.633 billion in statutory revenue, the Federal Government received ₦366.262 billion, state governments got ₦185.773 billion, local governments took ₦143.223 billion, while ₦132.374 billion went to mineral-producing states.
Similarly, from the ₦609.430 billion VAT revenue, ₦91.415 billion was allocated to the Federal Government, ₦304.715 billion to states, and ₦213.301 billion to local governments.
The Federal Government also received ₦5.276 billion from the ₦35.171 billion EMTL, while states and local governments received ₦17.585 billion and ₦12.310 billion, respectively.
In the solid minerals revenue distribution, the Federal Government received ₦12.933 billion, states got ₦6.560 billion, local governments took ₦5.057 billion, and ₦3.668 billion was allocated to mineral-producing states.
The ₦178 billion augmentation was distributed with ₦93.770 billion going to the Federal Government, ₦47.562 billion to state governments, and ₦36.668 billion to local governments.
Despite the decline in VAT and other revenue sources, FAAC noted a significant increase in Oil and Gas Royalty and the Electronic Money Transfer Levy for February 2025.
