₦airaland Forum

How FG collects the lion share of the allocations as against the states who were once collecting the bigger shares during the regional system.

Following several heated debates and controversies surrounding revenue sharing between the Federal Government and the federating units.

On Nov 23, 1979, President Shehu Shagari set up the presidential commission on revenue allocation headed by Dr Pius Okigbo, an economist and educator from Ojoto, Anambra.

The FG, 19 states and LGs submitted their memo to the Commission on how revenues should be allocated.

FG wanted 70% for itself, 20% for states and 10% for LGs whereas the states wanted FG to have between 28% - 50% and the rest for themselves.

In June 1980, the commission submitted its report to the Government recommending,
53% to FG,
30% to states,
10% to LGs and
7% for special fund.

The commission hinged its recommendation on the following principles:
1. Derivation - states which generate resources within their borders receive more money.

2. Population, Land mass - states with more population and bigger land mass receive more money. It's believed that the more the population, the higher the demands for goods and services.

3. Equality - A portion is equally shared among all the states.

A revised sharing formula followed in 1999 soon as President Obasanjo assumed power. Since then, successive Governments have retained the sharing formula.

Obasanjo gave FG - 52.68%,
States - 26.72%
LGs - 20.60%,
Special fund - 1%,
while implementing the 13% derivation to oil producing states to help cushion the effects of oil exploration and support development in the host communities ( constitutionally should go directly to the LGs of the affected communities but unfortunately the Governors have hijacked the funds)

With this why is states like Jigawa and rest getting more than other states with more population....

A federation where money come from the center is strange

Effective from January 2026, President Bola Tinubu's Administration has taken a bold step to ensure Nigeria's landscape will undergo a significant shift with the introduction of a new revenue sharing formula. A change set to redefine how tax revenues are distributed across the federation. The new sharing formula as follows:
FG - 10%
States - 55%
LGs - 35%

This new principle of derivation gives states a greater share of the VAT generated within their borders. It reduces over reliance on federal allocations, promotes fiscal responsibility as well as fairer distribution.

SMH

mrvitalis:
A federation where money come from the center is strange

Thanks to Aguiyi Ironsi. See how Shagari used another ibo man to circumvent the states.

Putindbutt:
Effective from January 2026, President Bola Tinubu's Administration had taken a bold step to ensure Nigeria's landscape will undergo a significant shift with the introduction of a new revenue sharing formula. A change set to redefine how tax revenues are distributed across the federation. The new sharing formula as follows:
FG - 10%
States - 55%
LGs - 35%

This new principle of derivation gives states a greater share of the VAT generated within their borders. It reduces over reliance on federal allocations, promotes fiscal responsibility as well as fairer distribution.

This is very good step in the right direction if true. I have not taken time to grow through this new tax law stuff.

This will keep all governors on their toes and greatly reduce corruption at the center. Why are people criticising it

Godfullsam:
This is very good step in the right direction if true. I have not taken time to grow through this new tax law stuff.

This will keep all governors on their toes and greatly reduce corruption at the center. Why are people criticising it

Anything that challenges the old system, people will try and fight it. People naturally resist a change.

Putindbutt:
Thanks to Aguiyi Ironsi. See how Shagari used another ibo man to circumvent the states.

Your brother is president rewrite the mistake of an Igbo man

Putindbutt:
Effective from January 2026, President Bola Tinubu's Administration has taken a bold step to ensure Nigeria's landscape will undergo a significant shift with the introduction of a new revenue sharing formula. A change set to redefine how tax revenues are distributed across the federation. The new sharing formula as follows:
FG - 10%
States - 55%
LGs - 35%

This new principle of derivation gives states a greater share of the VAT generated within their borders. It reduces over reliance on federal allocations, promotes fiscal responsibility as well as fairer distribution.

Eko ti choke

mrvitalis:
Your brother is president rewrite the mistake of an Igbo man

So, why then do you always complain about the system that you help create.

Sharing money by mouths to feed when their hands arent challenged is one of the foundations of the deep entitlement mentality ravaging the north. They believe FG impregnates women.

Putindbutt:
So, why then do you always complain about the system that you help create.

Ya brother is president let him change the law. Moreover the sharing formula you posted relates only to vat. Not other revenues.

nedu666:
Ya brother is president let him change the law. Moreover the sharing formula you posted relates only to vat. Not other revenues.

Yeah, the President is committed to changing it already with constitutional amendment and new tax reform. So keep quiet and stop sulking as if you weren't the one that was used as a tool to destroy the system.

Godfullsam:
This is very good step in the right direction if true. I have not taken time to grow through this new tax law stuff.

This will keep all governors on their toes and greatly reduce corruption at the center. Why are people criticising it

It is selective - Imagine because Lagos has that advantage of having higher economic activities, Tinubu decides to make a different sharing formula, while oil producing states are still using the old formula, even you add the 13% derivative, it is no where near 55%


Does this look fair? Why not do the same for states with their natural resources to take 55% ?

Putindbutt:
So, why then do you always complain about the system that you help create.

I didn't create it, I and people like me complain because the present system is not working

And those in power should strive to change the system

mrvitalis:
I didn't create it, I and people like me complain because the present system is not working

And those in power should strive to change the system

Who created the system?, same you that's complaining.

Brendaniel:
Because of 2 major reasons

1. The Method - it has to do with only VAT, Lagos enjoys VAT's from all the 36 states of the federation including FCT based on head quarters of most companies, imagine all the MTN cards in Nigeria bought and all the VAT's goes to Lagos, so Lagos now gets 55 % of all that VAT.

2. It is selective - Imagine because Lagos has that advantage of having most head quarters, Tinubu decides to make a different sharing formula, while oil producing states are still using the old formula, even you add the 13% derivative, it is no where near 55%


Does this look fair? Why not do the same for states with their natural resources to take 55% ?

Lol, these election losers are way too ignorant. Don't you think the old system is far favourable to Lagos than the new system?. When almost all companies headquartered in Lagos and they pay vat to Lagos. But the President says Vat distributable will no longer be only from where it's collected but where the goods and services are being consumed. Yet you still dey complain, never I have seen this kind of bitterness

Putindbutt:
Lol, these election losers are way too ignorant. Don't you think the old system is far favourable to Lagos. When almost all companies headquartered in Lagos and they pay vat to Lagos. But the President says Vat distributable will no longer be only from where it's collected but where the goods and services are being consumed. Yet you still dey complain, never I have seen this kind of bitterness

Where in the tax law is it written that the tax will be accrued to where the consumption of goods and services are consumed and not based on the head quarters?

Brendaniel:
Where in the tax law is it written that the tax will be accrued to where the consumption of goods and services are consumed and not based on the head quarters?

This one is even ignorant of the law and he's talking, Lol. That's what they do on social media, talk ignorantly about anything and everything.

Putindbutt:
Who created the system?, same you that's complaining.

Am I ironsi? Lmao this primitive thinking

Putindbutt:
Effective from January 2026, President Bola Tinubu's Administration has taken a bold step to ensure Nigeria's landscape will undergo a significant shift with the introduction of a new revenue sharing formula. A change set to redefine how tax revenues are distributed across the federation. The new sharing formula as follows:
FG - 10%
States - 55%
LGs - 35%

This new principle of derivation gives states a greater share of the VAT generated within their borders. It reduces over reliance on federal allocations, promotes fiscal responsibility as well as fairer distribution.

Sounds good

mrvitalis:
Am I ironsi? Lmao this primitive thinking

Who's busy disturbing us with biafra noise everyday?

Putindbutt:
This one is even ignorant of the law and he's talking, Lol. That's what they do on social media, talk ignorantly about anything and everything.

And you can't still show me where in the tax law to back up your claim...

Revisionists are back in full force..
APC and their vile propaganda

Brendaniel:
And you can't still show me where in the tax law to back up your claim...

I should show you a public document that has been passed by the Senate?. Even before it was passed, several sections were debated but you're not interested. If you want to spread your fake news, you won't ask me to help you.

owobokiri:
Revisionists are back in full force..
APC and their vile propaganda

E shock you abi?. Google Pius Okigbo Commission and cure your ignorance.

Putindbutt:
I should show you a public documents that has been passed by the Senate?. Even before it was passed, several sections were debated but you're not interested. If you want to spread your fake news, you won't ask me to help you.

Once I see that line, you guys don't fail to repeat it when there is no evidence to your claim...

You said you know something and you can't prove that what you know exists, then you want me to find the proof for you, are you really normal?

Brendaniel:
Once I see that line, you guys don't fail to repeat it when there is no evidence to your claim...

You said you know something and you can't prove that what you know exists, then you want me to find the proof for you, are you really normal?

Like I said, if you want to lie against the Government, you won't ask me to help you. You haven't read the documents, you don't know anything about the laws, yet you're making up lies in your usual manner and then asking me to help you. You must be high on Agulu weed.

Putindbutt:
I should show you a public documents that has been passed by the Senate?. Even before it was passed, several sections were debated but you're not interested. If you want to spread your fake news, you won't ask me to help you.

Putindbutt:
This one is even ignorant of the law and he's talking, Lol. That's what they do on social media, talk ignorantly about anything and everything.

You are just doing only one thing on this your own thread: making empty noise!!!

Complete garbage.
What's your thread all about? Is it about sharing formula or about Okigbo?


Shagari is a northerner and former head of state but you are trying to heap only God knows what to Okigbo!
You people did same thing to the Emefiele and left Buhari out just as you did to shagari!

But when it came to then CBN gov,sanusi,you left him out and attacked Jonathan...you don't even know the composition of ironsi's govt but blame him already!


Nigerian!

Brendaniel:
Once I see that line, you guys don't fail to repeat it when there is no evidence to your claim...

You said you know something and you can't prove that what you know exists, then you want me to find the proof for you, are you really normal?

We know him very well,he's a complete over the roof mental