The Tinubu Media Support Group (TMSG) has expressed confidence that states and local governments will receive significantly higher allocations from Value Added Tax (VAT) proceeds in 2026, following the Federal Government’s decision to concede five per cent of its share to sub-national governments.
The group said the move reflected President Bola Tinubu’s strong commitment to grassroots development and fiscal empowerment of states and local councils.
In a statement signed by its Chairman, Emeka Nwankpa, and Secretary, Dapo Okubanjo, TMSG noted that the concession would automatically increase allocations to states from the Federation Account.
According to the group, data from the Federation Account Allocation Committee (FAAC) shows that VAT disbursements to the three tiers of government rose by 26.46 per cent year-on-year from N6.11 trillion in 2024 to N7.73 trillion in 2025 with states receiving N3.77 trillion in 2025.
While some observers attribute the increase to inflationary trends, TMSG argued that improved compliance by businesses and enhanced efficiency in revenue collection by the Federal Inland Revenue Service (FIRS), now known as the Nigerian Revenue Service (NRS), played a significant role.
“With the tax reforms now operational, particularly the Federal Government’s decision to concede five per cent from its original 15 per cent share to states, allocations to sub-nationals from VAT collections are bound to increase further,” the statement said.
TMSG explained that under the new tax regime, the Federal Government now receives 10 per cent of VAT collections, while states get 55 per cent and local governments 35 per cent a structure it described as a deliberate effort to strengthen fiscal federalism and support developmental projects at the grassroots.
“We believe the Tinubu administration deserves commendation not only for improving VAT collections but also for ensuring that 90 per cent of VAT accruals now go to states and local governments,” the group stated.
It added that with the revised sharing formula and ongoing reforms, sub-national governments should receive substantially more than they did in 2025, urging them to utilize the increased allocations to deliver tangible development outcomes for citizens.
TMSG also called on state and local governments to complement the Federal Government’s efforts across key sectors of the economy to ensure that Nigerians, particularly those at the grassroots, feel the full impact of the reforms.
