President Bola Tinubu has approved the establishment of Infrastructure Support Fund (ISF) for the 36 states of the federation as part of measures to cushion the effects of the petrol subsidy removal on the people.
The approval was disclosed on Thursday in Abuja at the monthly meeting of the Federation Account Allocation Committee (FAAC), where N907 billion was shared among the three tiers of government for the month of June.
The National Economic Council (NEC), also on Thursday, resolved to do away with the national social register used by the Muhammadu Buhari administration to implement its conditional cash transfer.
The decision came as the federal government announced that it would distribute 252,000 metric tons of grains to states at subsidised rates in a continued effort to assist the citizenry amid hardship occasioned by removal of petrol subsidy.
Shedding more light on the establishment of the ISF for the 36 states, Special Adviser to the President, Special Duties, Communications and Strategy, Mr. Dele Alake, said, in a statement, “The new infrastructure fund will enable the states to intervene and invest in the critical areas of transportation, including farm to market road improvements; agriculture, encompassing livestock and ranching solutions; health, with a focus on basic healthcare; education, especially basic education; power and water resources, that will improve economic competitiveness, create jobs and deliver economic prosperity for Nigerians.
“The committee also resolved to save a portion of the monthly distributable proceeds to minimise the impact of the increased revenues – occasioned by the subsidy removal and exchange rate unification – on money supply, as well as inflation and the exchange rate.”
Alake disclosed that out of the June 2023 distributable revenue of N1.9 trillion, only N907 billion was distributed among the three tiers of government, while N790 billion will be saved, and the rest will be used for statutory deductions.
He stated, “These savings will complement the efforts of the ISF and other existing and planned fiscal measures, all aimed at ensuring that the subsidy removal translates into tangible improvements in the lives and living standards of Nigerians.
“The committee commends President Tinubu for the bold decision to remove the petrol subsidy, and even more importantly, for providing necessary support to the states to cushion the effects of the subsidy removal on Nigerians,”
Meanwhile, a communiqué issued at the end of the FAAC meeting for July 2023, which detailed the allocations, said a total sum of N907.054 billion Federation Account revenue was shared among the three tiers of government for June.
Allocations are usually shared from the preceding month’s revenue — meaning June allocations were shared in July.
The FAAC meeting was chaired by Accountant General of the Federation, Dr. Oluwatoyin Madein, according to a statement issued by Director (Press and Public Relations), Office of the Accountant General of the Federation, Bawa Mokwa.
The N907.054 billion total distributable revenue comprised distributable statutory revenue of N301.501 billion, distributable Value Added Tax (VAT) revenue of N273.225 billion, Electronic Money Transfer Levy (EMTL) revenue of N11.436 billion, and Exchange Difference revenue of N320.892 billion.
The total deductions for cost of collection for the month was N73.235 billion, while total deductions for savings, transfers and refunds stood at N979.078 billion.
From the total distributable revenue of N907.054 billion, the federal government received N345.564 billion, states got N295.948 billion, and the local governments received N218.064 billion.
A total sum of N47.478 billion was shared to the relevant states as 13 per cent derivation revenue.
The statement disclosed that a gross statutory revenue of N1,152.921 billion was received for the month of June 2023. This was higher than the sum of N701.787 billion received in the previous month by N451.134 billion.
From the N301.501 billion distributable statutory revenue, the federal government received N146.710 billion, the state governments received N74.413 billion while the local government councils received N57.370 billion.
The sum of N23.008 billion was shared to the relevant states as 13 per cent derivation revenue.
For the month of June 2023, the gross revenue available from the VAT was N293.411 billion. This was higher than the N270.197 billion available in the month of May by N23.214 billion.
The federal government received N40.984 billion, states received N136.613 billion and the local government councils received N95.629 billion from the N273.225 billion distributable VAT revenue.
The federal, state and local governments also received N1.715 billion, N5.718 billion and N4.003 billion, respectively, from the N11.436 billion Electronic Money Transfer Levy (EMTL) for the month
From the N320.892 billion Exchange Difference revenue, the federal government received N156.155 billion, states received N79.204 billion, and the local government councils received N61.063 billion.
The sum of N24.470 billion was shared to the relevant states as 13 per cent mineral revenue.
According to the communiqué, in the month of June 2023, Companies Income Tax (CIT) recorded tremendous increase. Import and Excise Duties, Value Added Tax (VAT), Oil and Gas Royalties increased significantly, while Petroleum Profit Tax (PPT) and Electronic Money Transfer Levy (EMTL) decreased considerably.
The balance in the Excess Crude Account (ECA) stood at $473,754.57 as of July 20, 2023.
Meanwhile, the acting Governor of Central Bank of Nigeria (CBN), Mr. Folashodun Shonubi, said the Federal Inland Revenue Service (FIRS) briefed the council and announced that it was ahead of its half-year target.
According to him, “Chairman of the Federal Inland Revenue making a presentation on what they have done so far, the level of collections. It was nice to know that they are ahead of their target for half year. And we expect that before or by the time the year ends they would exceed.
“They also gave us some idea of what next year should be like from them. And from this year, we hope to make some N10 trillion. The plan is that next year, they should be able, working with all the agencies, to provide N25 trillion as their contribution to the national coffers.”
Meanwhile, FIRS yesterday announced that it generated a total of N5.79 trillion in tax revenues for the half-year period of the year. This was disclosed by Executive Chairman, FIRS, Mr. Muhammad Nami, who stated that the figure represented the highest tax revenue collection ever recorded by the service in the first six months of a fiscal year.
The service had set a self-target of at least N12 trillion in tax revenue for 2023 after surpassing the N10 trillion target for 2022 by N100 billion.
According to a statement, Nami, who spoke while presenting the 2023-2024 tax revenue outlook to NEC, noted that the performance surpassed the N5.3 trillion mid-year target.
The report indicated that tax revenue from the oil sector between January and June 2023 stood at N2.03 trillion, as against a target of N2.3 trillion while non-oil tax collection stood at N3.76 trillion compared to its N2.98 trillion target.
Nami, in his presentation to NEC, further stated that the service collected a total of N1.65 trillion in tax revenues in June – the highest collection by the service in a single month.
He attributed the impressive performance to improved voluntary tax compliance enabled by the automation of FIRS’ tax administrative processes.
He said, “This is a good head start as we work towards meeting our target for the year. And it was achieved despite stubborn headwinds, such as the impact of the currency redesign and 2023 general elections on the economy in the first and second quarters of 2023.
“This half-year performance was achieved as a result of improved voluntary tax compliance by taxpayers, the continued improvement of automation of our tax administration processes, including the updated VAT filing processes, as well as our dogged engagement with stakeholders in both the formal and informal sectors of the economy.”
On the outlook for the remaining half of the year, the FIRS chairman gave assurances that the country should expect “better days ahead” in terms of tax revenue collection.
In the statement issued by his Special Assistant on Media and Communication, Mr. Johannes Oluwatobi Wojuola, Nami was quoted to have added, “We believe that the performance in the second half of the year would be better considering the continuing improvement to our tax administration processes and positive impact of current government’s policies on the economy.”
Deji Elumoye, Ndubuisi Francis and James Emejo in Abuja
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