The report highlights that the increase in non-oil revenue was primarily driven by higher corporate tax and VAT collections. However, oil revenue declined by 24.72 percent to N1.30 trillion, falling 75.39 percent short of its quarterly target due to challenges such as shut-ins caused by ageing oil pipelines and installations.
Abuja, Nigeria – The Federation Account revenue rose by 7.48 percent to N6.86 trillion in the third quarter of 2024, according to the latest Economic Report from the Central Bank of Nigeria (CBN).
The report attributes the growth to increased collections from corporate tax and value-added tax (VAT). Corporate tax is levied on profits made by companies operating in Nigeria under the Companies Income Tax Act and regulated by the Federal Internal Revenue Service (FIRS). VAT, on the other hand, is a consumption tax imposed on goods and services.
Non-Oil Revenue Takes the Lead
Of the total revenue, non-oil revenue accounted for N5.56 trillion, representing 81 percent of the gross earnings, while oil revenue contributed N1.30 trillion, or 19 percent. Non-oil revenue saw significant improvement, rising by 19.48 percent compared to the previous quarter and exceeding quarterly targets by 50.36 percent.
The report highlights that the increase in non-oil revenue was primarily driven by higher corporate tax and VAT collections. However, oil revenue declined by 24.72 percent to N1.30 trillion, falling 75.39 percent short of its quarterly target due to challenges such as shut-ins caused by ageing oil pipelines and installations.
Allocation of Revenue
From the total federally collected revenue of N6.87 trillion, about N3.92 trillion was distributed among the three tiers of government. The federal government received N1.27 trillion, state governments were allocated N1.36 trillion, and local governments got N0.99 trillion. An additional N0.30 trillion was allocated to the 13 percent Derivation Fund for oil-producing states.
The CBN report emphasizes the continued dominance of non-oil revenue in the composition of federation account earnings, underscoring improved revenue collection efforts.
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