By Nchetachi Chukwuajah
The Federal Government, the 36 states, and the 774 Local Government Councils shared a total of N3.007 trillion as federation revenue for July 2026, as statutory collections increased by N658.09 billion, driven by improved receipts from petroleum and non-oil taxes.
In a statement issued on Tuesday, August 18, by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Bawa Mokwa, the revenue disbursement was approved at the August 2026 meeting of the Federation Account Allocation Committee (FAAC) held in Owerri, Imo State.
According to the statement, the gross statutory revenue increased from N3.700 trillion recorded in June to N4.359 trillion in July, representing a N658.087 billion, or 17.8 percent, increase.
However, gross Value Added Tax (VAT) revenue declined marginally from N799.74 billion in June to N793.968 billion in July, representing a decrease of N5.778 billion, or 0.7 percent.
“In its regular monthly business, FAAC approved the disbursement of a total of N3.007 trillion to the Federal Government, the 36 State Governments, and the 774 Local Government Councils as revenue for July 2026.
“The month’s figures point to a strengthening underlying revenue base. Gross statutory revenue rose to N4.359 trillion in July 2026, up N658.087 billion, a 17.8 percent increase, from N3.700 trillion in June 2026, reflecting improved collection performance across oil and non-oil statutory sources.
“Gross VAT revenue held broadly steady at N793.968 billion, a marginal decline of N5.778 billion (0.7 percent) from N799.746 billion in June, suggesting consumption-tax receipts remain resilient month-on-month,” the statement read.
The communiqué showed that Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, excise duty, and gas flaring penalties increased during the month.
The gains, however, were partly offset by declines in VAT, import duty, CET levies, rental of gas flaring 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,” the statement added.
The development comes amid a sustained rise in revenues accruing to the Federation Account following major fiscal reforms, including the removal of the petrol subsidy, foreign exchange reforms, and efforts to widen the tax base.
The FAAC meeting, which was held on the sidelines of the National Council of Federation and Economic Development, brought together finance commissioners and accountants-general to discuss the fiscal health of the federation and ways of converting recent revenue growth into long-term economic strength.
The discussion at the meeting moved beyond the monthly allocation to whether rising federation allocations would translate into stronger state economies, improved infrastructure, and better social services.
Government officials were urged to focus on six key areas described as vital to fiscal fitness, including improving the quality of internally generated revenue, strengthening and commercialising public assets, expanding economic activity, attracting private capital, investing in human capital and improving transparency in public finance.
States were also encouraged to use the period of stronger revenue to build comprehensive asset registers, verify payrolls and ensure the timely publication of audited accounts.
“The FAAC convened its August 2026 meeting in Owerri, the Imo State capital, on the margins of the ongoing National Council of Federation and Economic Development, pairing the Committee’s routine monthly business with a broader push to strengthen fiscal fundamentals across Nigeria’s federating units.
“The FAAC session discussed the state of the economy, fiscal governance, and federal and subnational fiscal fitness. The session set out the scale of the recent revenue windfall and called for deliberate reform to convert it into durable fiscal strength rather than a temporary gain.
“The meeting noted that gross FAAC has risen significantly over the past three years driven by subsidy removal, exchange-rate unification, and tax reform,” the statement added.
The meeting further highlighted changes introduced under the Nigeria Tax Act 2025, which took effect from January 1, 2026, and altered the distribution of VAT revenue among the tiers of government.
Under the new framework, the states’ share of VAT revenue increased from 50 percent to 55 percent, while the Federal Government’s share declined from 15 percent to 10 percent.
The new arrangement also provides that 30 percent 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 committee also reaffirmed its commitment to the full and timely remittance of collectable revenues by Ministries, Departments and Agencies (MDAs) into the Federation Account.
It stressed the need to diversify government revenues beyond crude oil and said solid minerals and other non-oil royalty streams would remain areas of focus as the federation seeks to build a more resilient revenue base.
The committee noted that sustaining the strong statutory revenue recorded in July would depend on improved collection and remittance discipline by revenue-generating agencies.
It added that the challenge for governments was no longer merely to share rising revenues but to ensure that the additional funds were converted into productive investments capable of strengthening public finances and improving living standards.
The meeting, therefore, urged the Federal Government and the states to use the current period of revenue growth to institutionalise reforms that would make federation allocations more predictable while building stronger foundations for long-term economic development.
