VAT Disbursement Hits ₦551.77bn Amid 2026 Uptick

The increase comes amid a broader rise in federally shared revenues, as the government distributed a total of about ₦1.894 trillion to the federal, state, and local governments for the month under review.

Recent FAAC reports show that VAT remains one of the strongest non-oil revenue sources, with total VAT-related inflows for the month climbing to over ₦600 billion before final distribution adjustments.

Under the revenue-sharing structure, states continued to receive the largest share of VAT allocations, reflecting the revised formula that favours sub-national governments. In the most recent distribution cycle, states collectively took a significant portion of the VAT pool, reinforcing their reliance on monthly FAAC inflows to fund salaries, infrastructure, and public services.

Analysts note that the month-on-month growth in VAT receipts signals improving compliance and broader tax efficiency, even as oil revenues fluctuate. The sustained increase is also being linked to ongoing reforms in tax administration and the expansion of digital collection systems.

However, despite the uptick, fiscal experts continue to warn that Nigeria’s heavy dependence on VAT and statutory transfers underscores the need for stronger internally generated revenue at state level to ensure long-term stability.

With VAT maintaining its upward trajectory, expectations are that revenue performance could remain strong in the coming months if economic activity and compliance levels continue to improve