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FAAC shared ₦2.55 trillion among the Federal Government, states and local governments after gross federation revenue surged 32.6 percent to ₦4.5 trillion in June.
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Stronger collections from Companies Income Tax, VAT, petroleum royalties, and import duties boosted the distributable pool, lifting allocations across all tiers of government.
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While the higher allocation offers governments more fiscal room, sustaining the gains will depend on continued growth in tax receipts and oil-related revenues.
July 16, (THEWILL) — Nigeria’s federally collected revenue recorded a sharp increase in June, rising 32.6 percent month-on-month to ₦4.5 trillion and paving the way for larger statutory allocations to the Federal Government, state governments and local government councils.
Following the increase in revenue, the Federation Account Allocation Committee (FAAC) distributed ₦2.550 trillion as June 2026 revenue allocation, reflecting stronger collections from taxes, petroleum-related revenues and Value Added Tax (VAT).
The figures were disclosed in a communiqué issued after the July 2026 FAAC meeting in Abuja and released by the Office of the Accountant-General of the Federation (OAGF).
Revenue surge lifts distributable pool
According to FAAC, gross federation revenue available in June stood at ₦4.500 trillion before statutory deductions were made for collection costs, transfers, and refunds.
From the total revenue, ₦160.744 billion was deducted as the cost of collection, while ₦1.789 trillion went to transfers, interventions and refunds, leaving a distributable pool of ₦2.550 trillion.
The distributable amount comprised ₦1.809 trillion from statutory revenue and ₦740.724 billion generated from VAT.
Compared with the previous month, gross statutory revenue rose significantly to ₦3.700 trillion from ₦2.651 trillion, underscoring stronger federally collected receipts during the period.
Tax collections drove the increase
FAAC attributed the higher revenue largely to improved collections from Companies Income Tax (CIT), Capital Gains Tax (CGT), Stamp Duties, petroleum royalties, gas flare penalties, rents, Value Added Tax (VAT), import duties, and CET levies.
VAT receipts also strengthened during the month, with gross VAT collections rising to ₦799.746 billion.
However, the committee noted that Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), Mineral Royalties and Fees recorded notable declines, while Excise Duty posted only a marginal increase.
The mixed performance highlights Nigeria’s continued dependence on both oil-related receipts and non-oil taxes to support public finances.
Bigger allocations across all tiers
The stronger revenue translated into higher allocations for all three tiers of government.
The Federal Government received ₦923.438 billion, while the 36 state governments shared ₦838.208 billion. Local government councils received ₦591.390 billion, while oil-producing states received ₦197.610 billion as the constitutionally mandated 13 percent derivation revenue.
From the statutory revenue component alone, the Federal Government received ₦849.366 billion, the states received ₦430.810 billion, and the local governments got ₦332.136 billion.
Meanwhile, VAT distribution saw the Federal Government receive ₦74.072 billion, states ₦407.398 billion, and local governments ₦259.253 billion.
The latest allocation represents an increase over the ₦2.3 trillion shared in the previous month and provides additional fiscal resources for governments amid rising expenditure pressures. Whether the stronger revenue momentum can be sustained, however, will largely depend on continued improvements in tax administration and the performance of Nigeria’s oil sector.
