The Federal Government, Nigeria’s 36 states and 774 local government areas shared N3.007tn in federation revenue for July 2026, following a significant 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.
According to a statement issued by Bawa Mokwa, Director of Press and Public Relations in the Office of the Accountant-General of the Federation, gross statutory revenue climbed to N4.359tn in July from N3.700tn recorded in June.
The N658.087bn increase represents a 17.8 per cent rise, with the growth attributed to stronger collections from petroleum and non-oil revenue sources.
However, Value Added Tax collections recorded a slight decline. Gross VAT revenue fell by N5.778bn, or 0.7 per cent, from N799.746bn in June to N793.968bn in July.
The statement said, “In its regular monthly business, FAAC approved the disbursement of a total of N3.007tn to the Federal Government, the 36 State Governments and the 774 Local Government Councils as revenue for July 2026.”
It added, “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. Gross VAT revenue held broadly steady at N793.968bn, a marginal decline of N5.778bn (0.7 per cent) from N799.746bn in June, suggesting consumption-tax receipts remain resilient month-on-month.”
FAAC recorded higher collections from Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax and Stamp Duty Tax during the period.
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Petroleum and mineral royalties, excise duty and gas-flaring penalties also contributed to the increase, although the gains were partly reduced by lower VAT, import duty, Common External Tariff levies, gas-flaring rental fees and miscellaneous oil revenue.
Mokwa said the committee would continue working with revenue-generating agencies to improve collections.
“The Committee will continue to monitor as it works with revenue-generating agencies to close collection gaps and improve remittance discipline,” he stated.
The latest revenue increase comes amid ongoing fiscal reforms, including the removal of the petrol subsidy, foreign exchange reforms and measures aimed at expanding Nigeria’s tax base.
Beyond the monthly revenue sharing, the FAAC meeting focused on how governments at all levels could turn higher allocations into sustainable economic growth, improved infrastructure and better public services.
Officials were encouraged to strengthen internally generated revenue, commercialise public assets, expand economic activity, attract private investment, develop human capital and improve transparency in public finances.
States were also advised to maintain comprehensive asset registers, verify payroll records and publish audited financial statements on time.
The statement said, “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.”
It added, “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 committee also reviewed the impact of the Nigeria Tax Act 2025, which came into effect on January 1, 2026, particularly its changes to VAT distribution.
Under the new arrangement, states receive 55 per cent of the VAT pool, up from 50 per cent, while the Federal Government’s share fell from 15 per cent to 10 per cent.
Another provision requires 30 per cent of the states’ VAT pool to be distributed based on where goods and services are consumed rather than where companies have their registered headquarters.
FAAC said the arrangement could encourage states to attract businesses and expand economic activity within their jurisdictions.
The committee further reiterated the importance of Ministries, Departments and Agencies remitting all collectable revenues promptly into the Federation Account.
It also stressed the need to develop alternative revenue sources, particularly solid minerals and other non-oil sectors, to reduce dependence on crude oil.
FAAC warned that maintaining the July revenue gains would require stronger collection and remittance practices across government agencies.
“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.