Federation account gross revenue rose to a record N4.359 trillion in July 2026, driven by increased collections from oil and non-oil revenue sources.
The Federation Account Allocation Committee (FAAC), at its August meeting in Owerri, Imo State, approved the sharing of N3.007 trillion among the Federal Government, 36 states and 774 local government councils.
The amount represents an increase of N658 billion from the N2.349 trillion shared in June.
According to the committee, the rise in gross revenue was supported by higher collections from Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duties, petroleum royalties and mineral royalties.
Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant-General of the Federation, said the figures indicated an improvement in the country’s underlying revenue base.
However, Value Added Tax revenue declined slightly by N5.778 billion, or 0.7 per cent, to N793.968 billion during the period. Import duties and other levies also recorded marginal declines.
The revenue increase comes amid the Federal Government’s fiscal reforms, including the removal of petrol subsidy, foreign exchange market reforms, expansion of the tax base and implementation of the Nigeria Tax Act 2025.
The July allocation also marked the first full implementation of the revised VAT sharing framework under the Nigeria Tax Act 2025, which took effect on January 1, 2026.
Under the new framework, states’ share of VAT revenue increased from 50 per cent to 55 per cent, while the Federal Government’s share fell from 15 per cent to 10 per cent.
Also, 30 per cent of the states’ VAT pool is now distributed based on the location where goods and services are consumed, rather than the headquarters of the companies generating the revenue.
FAAC members said the increase in revenue should translate into improved development outcomes and stronger fiscal capacity across the three tiers of government.
The committee urged states to improve internally generated revenue, commercialise public assets, expand economic activities and attract more private-sector investment.
It said the priority should be to convert the revenue gains into sustainable economic growth rather than allowing the increase to become a temporary fiscal windfall.
