States, FG, LGs Share N3tn as July Revenue Rose by N658bn

The Federal Government, 36 states and 774 Local Government Councils shared N3.007 trillion in federation revenue for July 2026 as statutory collections increased by N658.09 billion.

The disbursement was approved at the August 2026 meeting of the Federation Account Allocation Committee held in Owerri, Imo State.

According to a statement issued on Tuesday by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Bawa Mokwa, gross statutory revenue rose to N4.359 trillion in July from N3.700 trillion recorded in June.

The N658.087 billion increase represents a 17.8 per cent rise, reflecting stronger collections from several oil and non-oil revenue sources.

However, gross Value Added Tax revenue declined slightly to N793.968 billion from N799.746 billion in June. The N5.778 billion reduction represents a 0.7 per cent decline.

The FAAC communiqué showed that several revenue streams recorded increases during the month, including Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, excise duty and gas flaring penalties.

The gains were partly offset by declines in VAT, import duty, Common External Tariff levies, gas-flaring rental fees and miscellaneous oil revenue.

The committee said it would continue working with revenue-generating agencies to close collection gaps and improve remittance discipline.

The increase in federation revenue comes amid ongoing fiscal reforms, including the removal of petrol subsidies, foreign exchange reforms and efforts to expand Nigeria’s tax base.

Beyond the monthly allocation, the Owerri meeting considered how the increased revenues could be converted into stronger state economies, improved infrastructure and better social services.

Officials were encouraged to improve internally generated revenue, strengthen and commercialise public assets, expand economic activity, attract private capital, invest in human capital and improve transparency in public finance.

States were also advised to use the period of stronger revenue to develop comprehensive asset registers, verify payrolls and publish audited accounts promptly.

The meeting further examined changes introduced by the Nigeria Tax Act 2025, which took effect on January 1, 2026, including a new VAT distribution framework.

Under the new arrangement, states receive 55 per cent of the VAT pool, up from 50 per cent, while the Federal Government’s share fell from 15 per cent to 10 per cent.

The framework also provides that 30 per cent of the states’ VAT pool should be distributed according to the place of consumption rather than the location of a company’s registered headquarters.

The change is expected to strengthen the connection between economic activity within states and the revenue they receive, potentially encouraging subnational governments to attract businesses and expand their economic bases.

FAAC also reaffirmed the importance of timely remittance of collectable revenues by Ministries, Departments and Agencies into the Federation Account.

The committee stressed the need to diversify government revenue beyond crude oil, with solid minerals and other non-oil revenue streams remaining areas of focus.

It noted that maintaining the July revenue gains would require stronger collection and remittance discipline.

The committee therefore urged the Federal Government and state governments to use the current revenue growth to implement reforms and investments that can strengthen public finances and improve living standards.