FAAC: FG, States, LGs get N3.007tn as statutory revenue rises 17.8%

The Federal Government, 36 states and 774 local government councils shared a total of N3.007 trillion in revenue generated in July, following a significant increase in statutory collections.

The Federation Account Allocation Committee (FAAC) approved the distribution at its August meeting in Owerri, Imo State, as officials reviewed recent revenue performance and considered measures to strengthen revenue mobilisation and public financial management.

Of the total allocation, the Federal Government received N1.146 trillion, while the states received N943.352 billion and the local government councils received ₦673.649 billion.

An additional N243.478 billion, representing the 13 per cent derivation from mineral resources, was shared among benefiting states.

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The allocation followed a sharp increase in gross statutory revenue, which rose to N4.359 trillion in July from N3.700 trillion in June.

The N658.087 billion increase represents a month-on-month growth of 17.8 per cent.

According to FAAC, the increase was driven by stronger collections from Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, excise duty and gas-flaring penalties.

However, the gains were partly offset by weaker receipts from Value Added Tax (VAT), import duties, Common External Tariff levies, rental fees from gas flaring and miscellaneous oil revenue.

Gross VAT revenue declined marginally to N793.968 billion in July from N799.746 billion in June, representing a decrease of N5.778 billion or 0.7 per cent.

FAAC said it would continue working with revenue-generating agencies to close collection gaps and strengthen discipline around remittances into the Federation Account.

The committee also reaffirmed the requirement for all collectible revenue to be remitted fully, transparently and on time, particularly ahead of a planned reconciliation of Federation Account records.

“Gross FAAC allocations have risen significantly over the past three years, driven largely by subsidy removal, exchange-rate unification and tax reforms,” the committee said.

The latest increase in Federation revenue comes as the government seeks to strengthen public finances and improve the capacity of the three tiers of government to fund development and social investment.

The FAAC meeting was held on the margins of the National Council of Federation and Economic Development, where Commissioners of Finance and Accountants-General also discussed subnational fiscal fitness.

The session focused on measures states could adopt to strengthen their finances and ensure that increased allocations translate into sustainable development and improved social investment.

FAAC also highlighted the Nigeria Tax Act 2025, which took effect on January 1, as a major change to the revenue-sharing framework.

Under the new system, states receive 55 per cent of the VAT pool, up from 50 per cent, while the Federal Government’s share was reduced to 10 per cent from 15 per cent.

The new framework also provides for 30 per cent of the states’ VAT pool to be distributed according to the location where goods and services are consumed, rather than where a company’s registered headquarters is located.

The committee said the change was intended to establish a stronger link between economic activity and the revenue received by states.

FAAC urged governments to focus on six key measures of fiscal strength: revenue quality, asset strength, economic growth, capital attraction, human capital and institutional transparency.

States were encouraged to broaden their internally generated revenue beyond narrow tax bases, put idle public assets to productive use and develop official state-level gross domestic product data to better measure economic activity.

The committee also called for predictable business environments capable of attracting investment, alongside sustained investment in education and healthcare.

On public financial management, FAAC urged all tiers of government to maintain timely and audited accounts, establish comprehensive asset registers, verify payrolls and publish audited financial statements within the next 12 months.

“Achieving sustainable fiscal strength will require continued discipline in revenue collection and remittance by Ministries, Departments and Agencies,” FAAC said.

The committee said sustaining the improvement in statutory revenue would depend on continued efforts to diversify government income beyond oil, with solid minerals and other non-oil royalty streams identified as areas with potential for stronger collections.