In a meeting held yesterday, the Federation Account Allocation Committee (FAAC) approved the distribution of ₦2.103 trillion among the three tiers of government as the shareable revenue for September 2025.
Breakdown of the Allocation
From the total, the disbursement is divided as follows:
- Federal Government: ₦711.314 billion
- States: ₦727.170 billion
- Local Governments: ₦529.954 billion
- Oil-Producing States (13% Derivation): ₦134.956 billion
From the gross revenue, ₦116.149 billion was set aside for cost of collection, while ₦835.005 billion was deducted for transfers, interventions, and refunds.
Composition of Revenue Sources
- Value-Added Tax (VAT)
- Gross VAT receipts: ₦872.630 billion, up from ₦722.619 billion in August
- Deductions: ₦34.905 billion (cost of collection) + ₦25.132 billion (transfers, refunds, interventions)
- Net available for sharing: ₦812.593 billion
- Federal: ₦121.889 billion
- States: ₦406.297 billion
- LGs: ₦284.408 billion
- Statutory Revenue
- Gross statutory revenue: ₦2.128 trillion (a decline from August)
- Deductions: ₦79.090 billion (collection cost) + ₦809.873 billion (transfers, refunds)
- Balance to share: ₦1.239 trillion
- Federal: ₦581.672 billion
- States: ₦295.032 billion
- LGs: ₦227.457 billion
- Derivation (13%): ₦134.956 billion
- Electronic Money Transfer Levy (EMTL)
- Total: ₦53.838 billion
- Federal: ₦7.753 billion
- States: ₦25.842 billion
- LGs: ₦18.089 billion
- Cost of collection: ₦2.154 billion
Combining all sources (statutory, VAT, EMTL), the total distributable amount for September stood at ₦2.103 trillion.
Observations & Implications
- The upward movement in VAT receipts was a key driver in the higher shareable pool for September.
- Statutory revenues dipped compared to the previous month, exerting pressure on non-VAT components.
- The burden of deductions (collection cost, interventions, refunds) continues to consume a significant share of gross revenue before distribution.
- The relatively large share accruing to states and derivation payments underscores the ongoing fiscal challenges in balancing resource control and federal redistribution.
Looking Ahead
The FAAC’s performance in September will be closely watched in the coming months. Sustained growth in non-oil tax revenues and tightening of collection efficiencies will be critical for bolstering Nigeria’s fiscal stability and ensuring more predictable allocations to states and local governments.