The Federation Account Allocation Committee (FAAC) has distributed a total of ₦1.97 trillion among the three tiers of government for December 2025, marking a significant revenue milestone at the start of the 2026 fiscal year.
This allocation, finalized during the January meeting in Abuja, was heavily bolstered by a dramatic spike in Value Added Tax (VAT) collections, which helped offset a slight dip in statutory revenue.
According to a statement from the Office of the Accountant General of the Federation, the distributable pool was composed of ₦1.084 trillion in statutory revenue, ₦846.51 billion from VAT, and ₦38.11 billion from the Electronic Money Transfer Levy (EMTL).
A detailed analysis of the disbursement reveals that the Federal Government received ₦653.50 billion, while State and Local Government Councils received ₦706.47 billion and ₦513.27 billion, respectively.
Additionally, oil-producing states were allocated ₦96.08 billion under the 13 percent derivation principle.
The gross revenue available for the month actually reached ₦2.585 trillion, but ₦104.70 billion was deducted as the cost of collection, with another ₦511.59 billion earmarked for critical transfers, refunds, and national savings.
The performance of VAT was the standout feature of the month, nearly doubling from ₦563.04 billion in November to a gross of ₦913.96 billion in December.
This surge reflects increased economic activity and improved tax administration efficiency during the year-end period.
While Companies Income Tax and Import Duties also saw upward trends, the report noted declines in Petroleum Profit Tax and Hydrocarbon Tax. As subnational governments face mounting fiscal pressures to fund infrastructure and public services, these record-level allocations remain a vital lifeline for state and local economies across the federation.