Lagos State retained its position as the leading recipient of VAT in January 2026, receiving a gross allocation of N61.00 billion, up sharply from N36.10 billion—a 68.98% increase as Nigeria’s Value Added Tax (VAT) allocations to states rebounded sharply in January 2026, rising by 74% month-on-month to N423.25 billion, up from N242.92 billion in December 2025.
After a deduction of N10.89 billion, the state’s net allocation stood at N50.12 billion, reaffirming Lagos’ status as Nigeria’s largest contributor and beneficiary of VAT revenue.
Net VAT allocations similarly jumped by 77.72% to N412.37 billion during the period, reflecting broad-based gains across both top-performing and lower-ranked states.
Analysts attribute the increase to improved tax collection, heightened compliance, and a rebound from the subdued December distributions.
Other leading states recorded significant growth: Rivers State: N16.89 billion, up from N10.02 billion (68.62% increase); Kano State: N16.32 billion, up from N9.31 billion (75.23% increase); Oyo State: N15.80 billion, up from N9.45 billion (67.29% increase); Kaduna State: N11.99 billion, up from N7.98 billion (50.17% increase).
The next tier of states—including Katsina, Jigawa, Delta, Niger, and Akwa Ibom—also posted strong gains, with allocations ranging from N10.82 billion to N11.90 billion, representing growth between 74% and 96%.
Even states with smaller allocations recorded notable increases: Taraba State: N8.10 billion, up from N4.84 billion (67.42% increase); Yobe State: N8.21 billion, up from N5.23 billion (57.09% increase)Ebonyi; State: N8.32 billion, up from N4.96 billion (67.77% increase); Gombe State: N8.38 billion, up from N4.69 billion (78.73% increase); Cross River State: N8.73 billion, up from N4.93 billion (76.99% increase).
Other states including Nasarawa, Abia, Ekiti, Kwara, and Kebbi received allocations ranging from N8.92 billion to N9.09 billion, with growth rates between 71% and over 90%, highlighting consistent nationwide upward movement.
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The January VAT data indicates a strong recovery in revenue distribution across states, reflecting improved economic activity and tax compliance.
While growth was widespread, disparities remain between top-performing economic hubs and smaller states, illustrating ongoing differences in consumption and economic scale.
A broader report from Nigeria’s Federation Account Allocation Committee (FAAC) shows that total net allocations to states in January 2026 amounted to N703.26 billion, a 7.18% increase compared to December 2025.
Gross distributable revenue stood at N2.59 trillion, with N546.14 billion allocated to the Federal Government and N511.17 billion to Local Government Councils (LGCs), making states the largest recipients among the three tiers of government.
The surge in allocations was largely driven by statutory revenue inflows, VAT collections, and electronic transaction levies.
Year-on-year, allocations rose by 32.06%, though the top 10 states accounted for nearly 45% of total disbursements, highlighting a persistent fiscal gap between leading and lower-ranked states.