Significant improvement in Federal Government’s revenue drive has led to an increase in the cost of collection by agencies of government. Findings by New Telegraph revealed that in the first half of the current year, the collection cost increased to N657.99 billion.

The amount represents a 41.94 per cent increase, or N194.42 billion, over the N463.57 billion that the three agencies received as cost of collection in the corresponding period of last year.

The Federal Inland Revenue Service (FIRS) and other key revenue generating agencies of the Federal Government, such as the Nigeria Customs Service (NCS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), got the total amount from the Federation Account Allocation Committee (FAAC) in the first six months of this year.

An analysis of the communiqués released by FAAC at the end of the seven meetings so far held by the Committee this year, indicates that revenue collection cost for the agencies stood at N107.79 billion in January 2025, N89.09 billion in February, N85.38 billion in March, N101.05 billion in April, N111.91 billion in May and N162.79 billion in June.

Under the current costof-collection arrangement, the FIRS receives four per cent of non-oil revenues; the NCS receives seven per cent of customs duties and levies, while the NUPRC gets four per cent of royalties, rents, and other oil and gas sector revenues.

For instance, the statement recently released by the Director, Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, on the outcome of the FAAC meeting for July 2025, partly read:

“The Federation Account Allocation Committee (FAAC), at its July 2025 meeting chaired by the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, shared a total sum of N1.818 trillion to the three tiers of government as Federation Allocation for the month of June 2025 from a gross total of N4.232 trillion.

“From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), Exchange Difference and N100.000 billion Augmentation from Non Mineral Revenue, the Federal Government received N645.383 billion, the States received N607.417 billion, the Local Government Councils got N444.853 billion, while the Oil Producing States received N120.759 billion as Derivation, (13% of Mineral Revenue).

“The sum of N162.786 billion was given for the cost of collection, while N2.251 trillion was allocated for Transfers Intervention and Refunds.”

Further analysis of data published by the FAAC indicates that revenue collection cost received by the three agencies has maintained an upward trend in recent years. For instance, in 2020, the FIRS received the sum of N111.97 billion as cost of collection; the NCS received N70.67 billion while the NUPRC (then known as the DPR) got N46.19 billion.

In 2021, FIRS’ collection cost stood at N145.89 billion, the NCS received N100.03 billion while the NUPRC received N83.45 billion. Similarly, data for 2022 shows that the FIRS received N200.16 billion as collection cost, the NCS got N128.64 billion while the NUPRC received N98.01 billion.