Tinubu Tax Reforms to Lift State Revenues Beyond 2025 Figures, TMSG Projects

Tinubu Tax Reforms to Lift State Revenues Beyond 2025 Figures, TMSG Projects

JOEL OLADELE, Abuja

The Tinubu Media Support Group (TMSG) has projected that state governments will receive higher revenues from Value Added Tax (VAT) than they did in 2025, following tax reforms introduced by President Bola Tinubu’s administration.

The group said the reforms, particularly the decision of the Federal Government to concede five per cent of its VAT share to states, would significantly increase allocations to sub-national governments beginning from 2026.

In a statement signed by its Chairman, Emeka Nwankpa, and Secretary, Dapo Okubanjo, TMSG expressed confidence that states would surpass the N3.77 trillion shared from VAT in 2025.

The group cited data from the Federation Account Allocation Committee (FAAC), which showed that VAT disbursements to the three tiers of government rose from N6.11 trillion in 2024 to N7.73 trillion in 2025, representing a 26.46 per cent year-on-year increase.

“We are aware that data from the Federation Account Allocation Committee (FAAC) on VAT allocation to the three tiers of government for 2025 showed a 26.46% year-on-year increase from the N6.11 trillion disbursed in 2024 to N7.73 trillion,” the statement read.

According to TMSG, the growth in VAT revenue was not solely due to inflation but also improved compliance by businesses and greater efficiency in revenue collection by the Federal Inland Revenue Service (FIRS), now known as the Nigerian Revenue Service (NRS).

The group noted that with the tax reforms now operational, allocations to states and local governments are expected to rise further.

“Now with the tax reforms operational, especially as the federal government has conceded five per cent from its original 15% share to states, the allocation to the sub-nationals from VAT collections is bound to increase,” TMSG stated.

It explained that under the new tax laws, the Federal Government will receive 10 per cent of VAT collections, while states will get 55 per cent and local governments 35 per cent.

“For the avoidance of doubt, under the new tax laws, the federal government gets 10% of VAT collections, 55% goes to the states while the local government collects 35% as part of efforts to empower the sub-nationals to embark on developmental projects,” the group added.

TMSG commended the administration for conceding what it described as 90 per cent of VAT accruals to states and local governments, saying the move demonstrates a commitment to grassroots development.

“There is no reason why the sub-nationals would not get far more than they did in 2025 from VAT this year. We also believe that there is no reason why Nigerians, especially at the grassroots should not feel the benefit of improved allocations,” the statement said.

The group urged state and local governments to utilise the anticipated increase in revenue to drive infrastructure, social services and economic development in their respective jurisdictions.