Tinubu’s Tax Reforms to Boost VAT Allocations to States, LGAs – TMSG

Tinubu’s Tax Reforms to Boost VAT Allocations to States, LGAs – TMSG

The Tinubu Media Support Group (TMSG) has expressed confidence that sub-national governments would this year receive significantly more than the N3.77 trillion allocated to states from Value Added Tax (VAT) collections in 2025, thanks to the strong commitment of the Bola Tinubu administration to grassroots development.

In a statement signed by its Chairman, Emeka Nwankpa, and Secretary, Dapo Okubanjo, TMSG highlighted the federal government’s decision to allocate five per cent of its VAT share to states starting in 2026 as a key factor that will automatically boost allocations from the federation account.

The statement reads in part:

“Data from the Federation Account Allocation Committee (FAAC) shows that VAT allocation to the three tiers of government rose by 26.46% year-on-year, from N6.11 trillion in 2024 to N7.73 trillion in 2025. While inflation may account for some of the increase, we recognize that improved compliance by businesses and efficiency in revenue collection by the Federal Inland Revenue Service (now Nigerian Revenue Service) played a major role.

“With the new tax reforms operational, and the federal government conceding five per cent of its original 15% VAT share to states, allocations to sub-nationals are set to increase. Under the revised framework, the federal government receives 10% of VAT collections, states 55%, and local governments 35%, empowering sub-national governments to implement developmental projects.

“The Tinubu administration deserves commendation for both improving VAT collections and conceding 90% of VAT accruals to states and local governments. There is every reason to expect sub-nationals to receive more this year than in 2025, with tangible benefits for Nigerians at the grassroots.”

TMSG further urged sub-national governments to enhance their efforts in complementing the Tinubu administration’s initiatives across all sectors of the economy.