The Federation Accounts and Allocation Committee (FAAC) reached a compromise to release N668.898 billion to the three tiers of government for the month of May, pending the resolution of issues raised by the state governors over remittances from the Nigerian National Petroleum Corporation (NNPC).
The Federal Ministry of Finance on Friday, that, the move was to cushion the hardship being experienced by civil servants in many states of the country, who have been unable to receive their June salary.
The ministry’s director of information, Hassan Dodo, who signed the statement said, “efforts are being intensified to address the unsatisfactory remittances.”
Recall that the 36 state governors had accused revenue generating agencies, especially the NNPC, of withholding some monies that ought to go into the federation account for sharing.
The N668.898billion released on Friday afternoon, according to Dodo, “is made up of statutory distributable sum of N575.475 billion and N 93.423 billion from the Value Added Tax (VAT).”
The Federal Government received N282.223 billion of the total; State Governments – N181.167 billion; and Local Government Councils – N136.490 billion.
The Oil Producing States got N53.071 billion as 13 per cent derivation while N15.947 billion was paid to the revenue generating agencies as costs of collections.
The statutory revenue of N575.475 billion received for the month of May 2018 was lower than the N613.057 billion received for April 2018 by a total of N37.582 billion. From the total statutory revenue of N575.475 billion, the Federal Government was given N268.770 billion; the States – N136.324 billion; Local Government Areas – N105.100 billion; the Oil Producing States – N53.071 billion, and the revenue generating agencies received N12.210 billion as costs of collections.
For the month of May 2018, the total revenue of N93.423 billion from the Value Added Tax (VAT) was N5.458 billion higher than the N87.965 billion distributed in April 2018.
From the total of N93.423 billion, the Federal Government received N13.453 billion; the States received N44.843 billion; the Local Government Councils received N31.390 billion, while N3.737 billion was received by the revenue collecting agencies.
Before the funds were released, state governors had directed their finance commissioners not to shift ground, unless the NNPC was prepared to remit fully, what is expected of it, into the federation account.
As a first measure to stop future shortchanging of the federation account, the state governments had resolved to “strengthen the processes” of making revenue generating agencies transmit accurate amounts to the federation account.
For three consecutive FAAC meetings, the remittances to the federation account by the NNPC had generated controversy, with the issue coming to a head, when NNPC remitted N127 billion into the account, instead of the expected N147 billion from royalties and Petroleum Profit Tax (PPT).
The impasse forced Finance Minister, Kemi Adeosun, to seek President Buhari’s intervention in the matter.