VAT, E-Money Transfers Outperform Oil as FAAC Distributes N2.1trn in Sept

While the Federation Account Allocation Committee (FAAC) shared N2.103 trillion among the three tiers of government for September 2025, the standout detail was the surging performance of non-oil revenue sources, which offset declines in statutory allocations tied to crude earnings.

A communiqué issued after FAAC’s October meeting in Abuja showed that Value Added Tax (VAT) and the Electronic Money Transfer Levy (EMTL) recorded significant growth, unlike Company Income Tax (CIT) and oil-related revenues, which saw sharp drops.

Gross statutory revenue, largely driven by oil and gas, fell to N2.128 trillion, a decline of over N710 billion from August’s N2.838 trillion. In contrast, VAT receipts jumped by N150 billion, rising to N872.63 billion, marking one of the highest month-to-month increases in the year.

Analysts view this as evidence of Nigeria’s gradual shift toward a consumption and digital economy, where spending and electronic transactions are increasingly driving government earnings.

FAAC reported that revenue from EMTL, charges on money transfers, reached N53.838 billion, maintaining steady growth since mid-year. The tax, introduced in 2020, has become a quiet but reliable pillar in Nigeria’s fiscal mix.

However, the report also underscored fragility in corporate and trade-based revenue. CIT and Common External Tariff (CET) levies both declined sharply, hinting at slower business activity and import volumes. Oil and Gas Royalty and Excise Duty also weakened slightly.

Despite the shortfall in statutory inflows, FAAC distributed a total of N2.103 trillion, drawn from a gross pool of N3.054 trillion. The Federal Government received N711.314 billion, States N727.170 billion, Local Governments N529.954 billion, and oil-producing states N134.956 billion as 13% derivation.

Fiscal observers note that the buoyant VAT and EMTL collections suggest Nigeria’s domestic economy, particularly the informal and retail segments, remains active even amid inflationary pressure and reduced oil output.

The communiqué, signed by Mohammed Manga, Director of Information and Public Relations at the Federal Ministry of Finance, reaffirmed FAAC’s commitment to transparency in revenue sharing.