VAT Allocations to States Will Rise Above N3.77tn in 2026, Says Tinubu Support Group
0
0
VAT Allocations to States Will Rise Above N3.77tn in 2026, Says Tinubu Support Group
By Alabidun Shuaib AbdulRahman
The Tinubu Media Support Group has expressed optimism that states of the federation will receive more than the N3.77tn allocated to them from Value Added Tax, VAT collections in 2025, citing President Bola Tinubu’s commitment to grassroots development.
The group said the anticipated increase would stem from the Federal Government’s decision to allocate five per cent of its share of VAT receipts to states beginning from 2026.
In a statement signed by its Chairman, Emeka Nwankpa, and Secretary, Dapo Okubanjo, the group noted that the development would automatically boost allocations to sub-national governments from the Federation Account.
READ ALSO: NIMC to Commence Ward-Level NIN Enrolment Feb. 16
The group referenced data from the Federation Account Allocation Committee, which showed that VAT distribution to the three tiers of government rose by 26.46 per cent year-on-year from N6.11tn in 2024 to N7.73tn in 2025.
It stated, “While it may be easy to attribute the increase to inflation, we are certain that improved compliance by businesses as a result of efficiency in revenue collection by the Federal Inland Revenue Service, now known as the Nigerian Revenue Service, played a major role.
“Now with the tax reforms operational, especially as the Federal Government has conceded five per cent from its original 15 per cent share to states, the allocation to the sub-nationals from VAT collections is bound to increase.
“For the avoidance of doubt, under the new tax laws, the Federal Government gets 10 per cent of VAT collections, 55 per cent goes to the states while the local governments collect 35 per cent as part of efforts to empower the sub-nationals to embark on developmental projects.”
The group commended the Tinubu administration for what it described as improved VAT collections and the decision to concede 90 per cent of VAT accruals to states and local governments.
“There is no reason why the sub-nationals would not get far more than they did in 2025 from VAT this year. We also believe that there is no reason why Nigerians, especially at the grassroots, should not feel the benefit of improved allocations,” the statement added.
TMSG urged state and local governments to complement the Federal Government’s efforts by ensuring that increased allocations translate into tangible development across critical sectors of the economy.
