Sunday, 27 July 2014

FG generates N4.03tn as federal revenue within the first six months of the year.

Minister of Finance, Dr. Ngozi Okonjo-Iweala
A total of N4.03tn was collected as federal revenue within the first six months of the year, figures obtained from the Ministry of Finance on Friday had revealed.
The amount was generated from two major revenue sources. They are mineral revenue made up of crude oil sales, oil and gas royalties, rent, gas flared penalty, petroleum profit tax and gas tax; and non-mineral revenue such as Value Added Tax, corporate taxes, customs import, excise and fees.
This is despite the serious disruptions to oil production and lifting operations occasioned by multiple leaks, pipeline vandalism and theft that occurred in the first six months of the year.
From the N4.03tn revenue, findings showed that the sum of N3.98tn was shared among the three tiers of government by the Federation Account Allocation Committee.
The committee, headed by the Minister of State for Finance, Ambassador Bashir Yuguda, is made up of commissioners for finance from the 36 states of the federation; the Accountant General of the Federation, Mr. Jonah Otunla, and representatives of the Nigerian National Petroleum Corporation.
Others members are representatives of the Federal Inland Revenue Service; the Nigeria Customs Service; Revenue Mobilisation, Allocation and Fiscal Commission as well as the Central Bank of Nigeria.
The federation account is currently being managed on a legal framework that allows funds to be shared under three major components – statutory allocation, Value Added Tax distribution and allocation made under the derivation principle.
Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue; states, 26.72 per cent; and local governments, 20.60 per cent.
The framework also provides that Value Added Tax revenue should be shared thus: Federal Government, 15 per cent; states, 50 per cent and local governments, 35 per cent.
Similarly, extra allocation is given to the nine oil producing states as specified by the 13 per cent derivation principle.
A breakdown of the N4.03tn revenue showed that the sum of N540.87bn was generated in January, N666.75bn in February while N614.35bn was collected in March.
For the months of April, May and June, the document stated that the sums of N584.15bn, N844.03bn and N784.88bn were earned for the country, respectively.
An analysis of the figures showed that the sum of N629.13bn was shared in January, while N641.29bn was allocated in February and N641.38bn in March.
For the months of April, May and June, it stated that the sums of N634.72bn, N683.89bn and N755.95bn were distributed among the Federal Government, states and local governments in that order.
Of the N3.98tn shared during the six months period, the Federal Government got about N1.57tn; the 36 state governments shared N936.65bn while all the 774 local government areas shared N710.43bn.
The balance of about N763bn went to the nine oil producing states based on the 13 per cent derivation principle.
The Chairman, Commissioners Forum of FAAC, Mr. Timothy Odaah, in an interview with our correspondent, called on state governments to reduce their dependence on the allocation made from the federation account in view of declining oil revenue.
Odaah, who is also the Commissioner for Finance representing Ebonyi State at FAAC, told our correspondent that in the light of the decline in revenue, there was a need for states to boost their internal revenue generating capacity to enable them to cushion the impact of the fall in oil revenue.
Oil revenue accounted for about 70.01 per cent of the gross federally collected revenue last year. The total revenue collected in 2013 was put at N9.748tn.
The nation was said to have lost N1.29tn last year, as the crude oil earnings dipped by 15.92 per cent to N6.82tn in 2013.
Data obtained from the Central Bank of Nigeria indicated that N8.11tn was earned from crude oil in 2012.
The CBN said that the oil revenue for the first quarter of 2013 stood at N1.85tn, while the second, third and fourth quarters recorded N1.81tn, N1.62tn and N1.54tn, respectively.
In 2012, the oil revenues of N2.37tn, N1.98tn, N1.93tn and N1.82tn were recorded for the first, second, third and fourth quarter, respectively.
It was learnt that the decline in crude earnings was due to a drop in crude export, as a result of rising cases of crude theft, pipeline vandalism and sabotage.

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