State governments received N2.37 trillion from Value Added Tax (VAT) allocations in the first half of 2026, representing a 23.5 percent increase from the N1.92 trillion they received during the same period in 2025.
The increase followed the introduction of a new VAT sharing formula, which shifted an estimated N219.72 billion from the Federal Government’s allocation to the states.
According to an analysis of Federation Account Allocation Committee (FAAC) reports, VAT remained one of Nigeria’s biggest sources of government revenue. It accounted for 31.2 percent of the N14.08 trillion shared among the federal, state and local governments between January and June 2026.
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A total of N4.39 trillion generated from VAT was distributed during the six-month period, up from N3.84 trillion shared in the first half of 2025, representing a 14.3 percent increase.
Out of the N4.39 trillion shared, state governments received N2.37 trillion, local government councils got N1.51 trillion,
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