The Federation Account Allocation Committee (FAAC) has distributed N2.428 trillion to the Federal Government, state governments and local government councils for September 2026, despite a decline in collections from several major tax sources.
The decline affected Companies Income Tax (CIT), Capital Gains Tax (CGT), Stamp Duties and Value Added Tax (VAT), according to a communiqué issued after FAAC’s meeting in Abuja.
Despite the revenue shortfalls, the amount shared among the three tiers of government increased by N90 billion from the N2.338 trillion distributed in August.
The September allocation comprised N1.672 trillion from statutory revenue and N756.587 billion from VAT proceeds.
Under the distribution, the Federal Government received N832.242 billion, while state governments were allocated N799.872 billion. Local government councils received N560.660 billion, while N236.049 billion was shared among eligible states as 13 per cent derivation revenue from mineral resources.
The latest figures highlight the mixed performance of government revenue, as improved collections from petroleum-related sources and other levies helped offset declining receipts from several taxes.
FAAC disclosed that gross revenue generated in September stood at N3.913 trillion. Of this amount, N131.758 billion was deducted as the cost of collection, while N1.352 trillion was allocated to transfers, refunds and savings.
Gross statutory revenue rose to N3.096 trillion in September from N2.850 trillion in August, representing an increase of N246.384 billion.
However, gross VAT revenue fell to N816.872 billion from N834.843 billion recorded in the preceding month, representing a decline of N17.972 billion.
A breakdown of the statutory revenue distribution showed that the Federal Government received N756.583 billion, state governments got N383.749 billion, and local government councils received N295.855 billion. The benefiting states also shared N236.049 billion as derivation revenue.
From the distributable VAT proceeds, the Federal Government received N75.659 billion, state governments were allocated N416.123 billion, while local government councils received N264.805 billion.
On revenue performance, the committee reported increases in collections from Petroleum Profit Tax, Hydrocarbon Tax, petroleum royalties, import duty, Common External Tariff levies and excise duty.
These gains, however, were partly offset by declining receipts from Companies Income Tax, Capital Gains Tax, Stamp Duties, VAT, mineral royalties, gas-flaring penalties and fees, as well as miscellaneous oil revenue.
The increase in statutory revenue ultimately supported the higher allocation to the three tiers of government, despite the weakness in VAT collections and other revenue streams.
The latest distribution comes as governments at the federal, state and local levels depend on monthly FAAC allocations to meet recurrent expenditure, fund infrastructure and deliver essential public services.
The contrasting performance of statutory revenue and tax collections also underscores the importance of sustaining revenue growth and strengthening non-oil revenue sources to support public spending.
