Taiwo Oyedele denies proposing reduction of FG’s share of FAAC revenue

Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, has denied proposing a reduction in the federal government’s share of revenue from the federation account allocation committee (FAAC).

The reports had claimed that the tax committee chairman recommended that the federal government should get only 10 percent of the total FAAC allocations, allowing states and local governments to share 90 percent.

This is against the existing sharing formula in which 52.68 percent of the FAAC revenue goes to the federal government, 26.72 percent to states, while local governments get 20.60 percent.

However, reacting to the reports on Sunday on X, Oyedele said his committee’s recommendation was explicitly in respect of the value-added tax (VAT) revenue.

“We did not recommend a reduction in the federal government’s share from federation account,” Oyedele posted.

“Our recommendation is in respect of VAT revenue, to increase the share of states and local governments from 85% to 90% and for states to discontinue with their other forms of consumption taxes which constitute multiple taxation on businesses and individuals.”

The FAAC is responsible for disbursing revenues from the federation to the federal, state, and local governments.

At the last meeting in September, FAAC  said it shared a total of N1.203 trillion in August 2024 from a gross total of N2.278 trillion to the three tiers of government.

The amount shared dropped by N155 billion compared to the N1.35 trillion allocated in July.

On October 4, the federal government, through the fiscal policy and tax reforms committee, announced the exemption of 63 items from the VAT, as part of its latest fiscal reforms.