FG, States, LGs Share N3trn as July Revenue Hits N4.36trn

The Federal Government, states and local councils shared N3.007 trillion as federation revenue for July 2026, following a sharp increase in statutory collections during the month.

The allocation was approved at the August meeting of the Federation Account Allocation Committee (FAAC), held in Owerri, Imo State.

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, said gross statutory revenue increased to N4.359 trillion in July from N3.700 trillion in June.

The N658.087 billion increase represents a 17.8 per cent rise, with improved receipts from petroleum-related sources and non-oil taxes driving the growth.

However, Value Added Tax (VAT) collections recorded a marginal decline during the period. Gross VAT revenue fell by N5.778 billion, or 0.7 per cent, from N799.746 billion in June to N793.968 billion in July.

The committee said Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, excise duty and gas-flaring penalties all recorded increases during the month.

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

“The Committee will continue to monitor as it works with revenue-generating agencies to close collection gaps and improve remittance discipline,” Mokwa said.

The latest increase in federation revenue comes amid sustained growth in government receipts following major fiscal reforms, including the removal of petrol subsidy, foreign exchange reforms and measures to widen the tax base.

Beyond the monthly allocation, the FAAC meeting focused on how the three tiers of government could convert improved revenues into stronger economies, infrastructure and social services.

The meeting, held alongside the National Council of Federation and Economic Development, brought together finance commissioners and accountants-general to discuss the fiscal health of the federation and measures to strengthen public finances.

Mokwa said officials were urged to focus on improving internally generated revenue, commercialising public assets, expanding economic activity, attracting private capital, investing in human capital and strengthening transparency in public finance.

States were also encouraged to use the period of improved revenue to develop comprehensive asset registers, verify payrolls and ensure prompt publication of audited financial statements.

The committee said the recent rise in FAAC receipts over the past three years had been supported by the removal of subsidy, exchange-rate reforms and tax reforms.

The meeting also considered changes introduced by the Nigeria Tax Act 2025, which took effect on January 1, 2026, particularly the new framework for distributing VAT revenue among the three tiers of government.

Under the arrangement, the states’ share of VAT revenue increased from 50 per cent to 55 per cent, while the Federal Government’s share declined from 15 per cent to 10 per cent.

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

The committee said the change could strengthen the link between economic activity in a state and the revenue it receives, potentially encouraging states to attract investment and expand their economic bases.

FAAC also reaffirmed its commitment to ensuring full and timely remittance of revenues collected by Ministries, Departments and Agencies into the Federation Account.

It stressed the need to reduce dependence on crude oil by developing alternative revenue sources, with solid minerals and other non-oil royalties identified as areas requiring greater attention.

The committee said sustaining the growth in statutory revenue would depend on improved collection and remittance by revenue-generating agencies.

It urged the Federal Government and state governments to use the current period of higher revenue to implement reforms and make productive investments rather than rely solely on increased monthly allocations.

“The Committee noted that sustaining the statutory revenue gains recorded in July 2026 will depend on continued discipline in collection and remittance across Ministries, Departments and Agencies,” the statement said.

It added that the committee would continue to support reforms aimed at improving the predictability and growth of allocations to the Federal Government, states and local governments.