The Federation Account Allocation Committee (FAAC), has convened its August 2026 meeting in Owerri, the Imo State capital, on the margins of the ongoing National Council of Federation and Economic Development (NACOFED) – pairing the Committee’s routine monthly business with a broader push to strengthen fiscal fundamentals across Nigeria’s federating units
Beyond approving the sharing of July 2026 revenue, the gathering was used to chart a path for states to convert Nigeria’s recent revenue growth into lasting fiscal strength, headlined by a dedicated retreat session for Commissioners of Finance and Accountant-General on subnational fiscal fitness.
The FAAC session discussed 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 have risen significantly over the past three years driven by subsidy removal, exchange-rate unification and tax reform.
The session highlighted the impact of the Nigeria Tax Act 2025, effective 1 January 2026: states’ share of VAT revenue rises from 50 percentv to 55 percent (the Federal Government’s falls from 15 percent to 10 percent ), while 30 percent of the states’ VAT pool is now allocated by place of consumption rather than a company’s registered headquarters – directly linking a state’s own economic activity to the size of its federation allocation.
A statement from the agency took critical looks at Revenue quality – diversifying own-source income beyond a narrow tax base, Asset strength – inventorying and putting idle state-owned assets to productive use, Growth engine – measuring and expanding the state and national economy, including through official state GDP data, Capital attraction – a stable, predictable business environment and structured investor engagement, Human capital – sustained investment in education and health as the foundation of future development and the Institutional plumbing – timely, audited and transparent public accounts.
All tiers of government were encouraged to use the current period of strong revenue growth to institutionalise reforms including comprehensive asset registers, payroll verification, and timely publication of audited accounts over the next twelve months.
It disclosed that 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 per cent 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 per cent) from N799.746 billion in June, suggesting consumption-tax receipts remain resilient month-on-month.”
The communiqué attributed the month’s gains to broad-based strength across several revenue lines. Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), Companies Income Tax (CIT), Capital Gains Tax (CGT), Stamp Duty Tax (SDT), Petroleum Royalties, Mineral Royalties, Excise Duty and Gas Flared Penalty all recorded significant increases in July 2026, pointing to firmer compliance and collection efficiency across both oil and non-oil channels.
These gains were partly offset by declines in Value Added Tax (VAT), Import Duty, CET Levies, Rental of Gas Flared Fee and Miscellaneous Oil Revenue, which the Committee will continue to monitor as it works with revenue-generating agencies to close collection gaps and improve remittance discipline, it stated.
It reaffirmed commitment to full, transparent and timely remittance of collectible revenue by all revenue-generating agencies into the Federation Account, ahead of the accounts reconciliation exercise for the period.
Continued emphasis on diversifying the federation’s revenue base beyond oil, in line with ongoing tax administration and non-oil revenue mobilisation reforms.
Alignment between FAAC’s technical work and the NACOFED platform, reinforcing coordination between the Federal Government and States on fiscal policy, revenue-sharing and shared economic development priorities and continued monitoring of solid minerals and other non-oil royalty streams as a growth area for future federation revenue.
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 (MDAs), and reiterated its support for reforms aimed at improving the predictability and growth of allocations to all three tiers of government.
