FAAC Allocates N2.094trn to FG, States, LGs

The Federation Accounts Allocation Committee (FAAC) has announced that the federal government, states, and local government councils shared a total of N2.094 trillion in distributable revenue for October 2025. The allocation reflects mixed movements across key revenue streams, with statutory revenue increasing while VAT collections declined.

According to a communiqué issued by FAAC after its monthly meeting, the N2.094 trillion distributed comprised N1.376 trillion in statutory revenue, N670.303 billion from Value Added Tax (VAT), and N47.870 billion from the Electronic Money Transfer Levy (EMTL). The committee said the revenue was shared among the three tiers of government in line with the established formula.

FAAC disclosed that the total gross revenue available for the month stood at N2.934 trillion, representing all earnings before statutory deductions. From this amount, N115.278 billion was deducted as the cost of collection by relevant revenue-generating agencies. An additional N724.603 billion was set aside for transfers, interventions, refunds, and savings—mechanisms routinely used to support various national obligations and reserve funds.

Of the total revenue pool, gross statutory revenue amounted to N2.164 trillion, slightly higher than the N2.128 trillion recorded in September. This marks an increase of N36.832 billion, signalling improved performance in key sectors such as oil royalties, Petroleum Profit Tax (PPT), and other non-oil revenue streams.

FAAC noted that the rise in statutory income contributed significantly to the month’s distributable pool, even as other revenue categories recorded decreases.

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In contrast, VAT revenue declined sharply. Gross VAT collections for October were N719.827 billion, falling below the N872.630 billion generated in September by N152.803 billion. The committee attributed the drop to lower consumption levels and reduced remittances from some sectors of the economy.

Despite the fall in VAT proceeds, the final distributable VAT figure remained robust at N670.303 billion, supporting federal allocations at a time of increased fiscal pressure across the states.

The EMTL revenue maintained steady performance, contributing N47.870 billion to the total amount shared. The levy, imposed on electronic transfers and remitted by financial institutions, has become a consistent source of federal revenue as digital transactions continue to rise nationwide.

According to the allocation framework, the federal government receives the largest share of statutory and VAT revenue, followed by the 36 states and 774 local government councils. Oil-producing states also receive 13 per cent derivation from oil and gas earnings before the revenue is shared.

Economic analysts say the October allocation reflects ongoing volatility in government earnings, driven by fluctuating oil production, exchange rate instability, and varying levels of tax compliance. They note that while October’s statutory revenue increase is encouraging, the sharp fall in VAT highlights persistent pressures on household spending and private-sector activity.

FAAC assured that it will continue monitoring national revenue performance and collaborate with revenue-generating agencies to improve compliance and expand the tax base.

The latest disbursement comes as states brace for rising expenditure needs, including salaries, infrastructure, and social services, amid efforts to strengthen fiscal sustainability.