Fidelia Soriwei, Abuja
The Federal Government, 36 states and 774 local government councils shared N3.007tn in federation revenue for July 2026 following a sharp increase in statutory collections.
The Federation Account Allocation Committee (FAAC) approved the allocation at its August meeting in Owerri, Imo State, with gross statutory revenue rising by N658.087bn, or 17.8 per cent, to N4.359tn in July from N3.700tn in June.
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, the increase was driven by stronger collections from petroleum and non-oil revenue sources.
The statement 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.
However, the gains were partly offset by weaker receipts from Value Added Tax, import duty, Common External Tariff levies, gas flaring fees and miscellaneous oil revenue.
Gross VAT revenue fell marginally by N5.778bn, or 0.7 per cent, to N793.968bn in July from N799.746bn recorded in June.
The statement quoted FAAC as saying, “The month’s figures point to a strengthening underlying revenue base. Gross statutory revenue rose to N4.359 trillion in July 2026, up N658.087bn, a 17.8 per cent increase, from N3.700tn in June 2026, reflecting improved collection performance across oil and non-oil statutory sources.”
FAAC said the Federal Government and subnational governments must use the stronger revenue position to improve fiscal sustainability, strengthen internally generated revenue, develop public assets, attract private investment and invest in human capital.
“The Committee will continue to monitor as it works with revenue-generating agencies to close collection gaps and improve remittance discipline,” Bawa stated.
The committee also called for stronger transparency in public finance, including comprehensive asset registers, payroll verification and timely publication of audited accounts by states.
The revenue increase was discussed alongside wider fiscal reforms, including petrol subsidy removal, foreign exchange reforms and tax reforms aimed at broadening Nigeria’s revenue base and improving the predictability of Federation Account allocations.
FAAC also highlighted changes under the Nigeria Tax Act 2025, which took effect on January 1, 2026. Under the new VAT sharing arrangement, states receive 55 per cent of VAT revenue, up from 50 per cent, while the Federal Government’s share fell from 15 per cent to 10 per cent.
The new framework also provides that 30 per cent of the states’ VAT pool will be distributed according to the location where consumption occurs, rather than solely by the location of a company’s registered headquarters.
FAAC said sustaining the July revenue gains would depend on improved collection and timely remittance by Ministries, Departments and Agencies, while stressing the need to diversify government income through solid minerals and other non-oil revenue streams.
“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, and reiterated its support for reforms aimed at improving the predictability and growth of allocations to all three tiers of government,” the statement concluded.
