Civil Servants’ December Salary Threatened As FG Postpones Revenue Allocation Meeting

Payment of December salary to civil servants may be delayed as the Federation Accounts Allocation Committee (FAAC) has postponed this month’s revenue allocation meeting by four days.

The meeting which was earlier scheduled to hold today December 13th has now been moved to December 17.

The Director, Home Finance Department in the Ministry of Finance, Budget and National Planning, Stephen Okon confirmed the development in a letter written to members of FAAC.

The Committee, headed by the Minister of Finance, Mrs. Zainab Ahmed, is made up of Commissioners of Finance from the 36 states, representatives of revenue generating agencies such as NNPC, Federal Inland Revenue Service, Department of Petroleum Resources, Central Bank of Nigeria, Nigeria Customs Service among others.

The Federation Account is currently being managed on a legal framework that allows funds to be shared under three major components.

They are statutory allocation, Value Added Tax distribution; and allocation made under the 13 per cent derivation principle.

Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue shared; State Governments, 26.72 per cent; and Local Governments 20.60 per cent.

The framework also provides that Value Added Tax revenue be shared thus: FG, 15 per cent; States, 50 per cent; and LGs, 35 per cent.

Similarly, extra allocation is given to the nine oil producing states based on the 13 per cent derivation principle.

The letter, which was obtained by THE WHISTLER on Monday night did not state the reason for the postponement.

But sources in the Ministry revealed that it may not be unconnected to the poor performance in revenue accruable to the federation account.

The letter reads, “l am directed to inform you that the Federation Account Allocation Committee (FAAC) meetings earlier scheduled to hold physically on the 14 December, 2021 at the Main Auditorium of the Federal Ministry of Finance, Budget and National Planning has been postponed due to certain circumstances.

“In view of the foregoing. I am to further inform you that the new date for the meetings is Friday,17 December, 2021 and the mode of holding the meetings would be Virtual.

“While we regret the inconveniences this change might have caused you, please accept the assurances of the Honourable Minister’s warm regards.”

Last month, the ability of Nigerian states and other tiers of government to meet their various obligations came under threat as gross monthly distribution by FAAC to the three tiers of government dropped by N68bn.

FAAC allocation to the three tiers of government and public agencies amounted to N671.9bn in November which is a decrease of 9.2 per cent from October revenue.

The 9.2 percent decline in November FAAC was due to the decrease in the revenue from Companies’ Income Tax (CIT), Petroleum Profit Tax (PPT), Value-Added Rax (VAT), Oil and Gas Royalties.

Only excise duty recorded an increase over the previous month.

This means various state governments already impacted by low internal revenue may find it difficult to finance their operations without enough remittance from FAAC.