Payout from January 2016 revenues by FAAC well below target

Proshare

Thursday, February 25, 2016 09:03 AM /FBNQuest Research

The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government in February (from January revenues) declined marginally to N370bn (US$1.88bn) from N388bn the previous month.

The net distribution from the federation account and the VAT pool combined is projected at N5.72bn this year in the expenditure framework for 2016-18. We can see that the payout in both January and February fell far short of the projected pro rata monthly average of N477bn.

There are initiatives underway to boost revenue collection from the non-oil economy: the Treasury Single Account, a review of waivers and exemptions, computerization, efficiency gains and recoveries (broadly defined by ourselves to include fines).

These initiatives will bear fruit over time. We are therefore unlikely to see much impact until H2 2016.



The Lagos State Internal Revenue Service provides a blueprint of how to get the job done. The state’s revenues soared from N600m per month in 1999 to N23bn in 2014. Its revenue service deployed a combination of strict enforcement, steps to make it easier to pay taxes and public relations.

It deliberately targeted the big earners first for the example set to low-income Lagosians, and closed down a well-known electronics market when it found the occupying companies were not paying their dues. (They did rapidly.)

For this account of the service’s work, we are indebted to the London-based Chatham House (RIIA) and its 2015 report Nigeria’s Booming Borders.

Related NEWS:

1.       Another low payout from December 2015 revenues by FAAC – Jan 28, 2016

2.      Declining Federal Allocation Mounting Pressure on the States – Jan 19, 2016

3.      A pick-up in the FAAC payout in October 2015 – Dec 21, 2015

4.      Another fall in the FAAC payout – Nov 03, 2015

5.      Oil to blame for the lower FAAC payout – Sep 28, 2015

6.      Calm to return after TSA scramble -  Sep 17, 2015

7.      Oil-related decline in the FAAC payout – Aug 31, 2015

8.     On the ropes, off the ropes – Aug 10, 2015

9.      Unexplained rise in the FAAC distribution – Aug 05, 2015

10.  One state’s pursuit of investment and jobs – Jul 31, 2015

11.   Further decline in FAAC distributions – May 19, 2015 

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