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TAX LAWS: #5tn Value Added Tax, VAT Windfall For States as New Formula Commences
The 36 states of the federation are set to receive an estimated N5.07tn as their share of Value Added Tax in 2026, following the commencement of a new VAT sharing formula introduced under the National Tax Acts, findings by The PUNCH have shown.....TAP TO CONTINUE READING
This development is contained in the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper approved by the Federal Executive Council.
According to the fiscal framework, the implementation of the new National Tax Acts from January 2026 will reduce the Federal Government’s VAT share from 15 per cent to 10 per cent, while the states’ share rises from 50 per cent to 55 per cent, and Local Governments continue to receive 35 per cent.
According to the projections in the MTEF/FSP document, the Federal Government’s VAT allocation is expected to drop to N922.53bn in 2026, down from N1.04tn in 2025, even as the VAT pool itself grows significantly year on year.
The projected N922.5bn allocation to the Federal Government represents 10 per cent of the anticipated N9.23tn distributable VAT revenue for 2026, confirming the full implementation of the new formula.
Under the previous formula used in 2025, the Federal Government received 15 per cent of the VAT pool, which was projected at N6.95tn for that year. The difference in share means the Federal Government will now receive five percentage points less of a larger pool.
If the previous 15 per cent formula had been retained in 2026, the Federal Government’s VAT share would have amounted to approximately N1.38tn. With only 10 per cent allocated under the revised law, the Federal Government is projected to receive N922.5bn.
The difference between the two figures is N461.27bn, which represents what the Federal Government may forfeit to the states as a result of the revised allocation ratio, if the revenue target is met.
The five percentage point shift in VAT share from the Federal Government to states is projected to give states an additional N461.27bn in 2026, pushing their collective allocation to N5.07tn, up from N3.47tn in 2025.
The 2026 figure represents 55 per cent of the N9.23tn pool, compared to the 50 per cent share of the N6.95tn pool in 2025. Local Governments, whose VAT share remains unchanged at 35 per cent, are expected to collect N3.23tn in 2026, up from N2.43tn in 2025.
The year-on-year growth in total VAT revenue, from N6.95tn to N9.23tn, provides some cushion to the Federal Government, even as it absorbs the loss in its percentage share. However, the data also makes it clear that the bulk of the VAT growth is now structurally flowing to subnational governments under the new tax law, which aims to deepen fiscal federalism.
Further projections in the fiscal document show that the VAT pool is expected to increase to N10.87tn in 2027 and N13.28tn in 2028. Applying the 10 per cent share, the Federal Government’s VAT revenue is projected to rise to N1.09tn in 2027 and N1.33tn in 2028.
These nominal increases reflect the expanding VAT base but do not reverse the structural shift in distribution. By contrast, the states’ 55 per cent share will yield N5.98tn in 2027 and N7.30tn in 2028, while Local Governments are projected to receive N3.81tn and N4.65tn respectively under their constant 35 per cent share.
The long-term trend indicates that state and local governments are now better positioned to benefit from rising VAT collections, especially as tax net expansion and digital enforcement continue to improve.
The VAT pool is only one segment of the total distributable public revenue. The main Federation Account pool—dominated by oil revenue, company income tax, and customs duties—is projected to decline sharply in 2026 before rebounding in subsequent years.
The main pool is expected to shrink from N60.26tn in 2025 to N41.06tn in 2026, representing a N19.2tn drop. The current revenue-sharing formula for the main pool gives the Federal Government 52.68 per cent, states 26.72 per cent, and local governments 20.60 per cent.
Based on these ratios, the Federal Government’s share is projected to decline from N31.74tn in 2025 to N21.63tn in 2026. This reflects a loss of about N10.1tn. State governments will see their share fall from N16.10tn to N10.97tn, while local governments will collect N8.46tn, down from N12.41tn.
Although the main pool is expected to improve slightly in subsequent years—rising to N45.67tn in 2027 and N50.90tn in 2028—the Federal Government’s earnings from this stream remain significantly below 2025 levels. Its share is projected to recover to N24.06tn in 2027 and N26.81tn in 2028.
Similarly, states are expected to receive N12.20tn and N13.60tn, while local governments would get N9.41tn and N10.48tn over the two years.
Another key component of the distributable pool is stamp duty revenue, formerly the Electronic Money Transfer Levy. The distributable stamp duty pool is projected to rise from N228.85bn in 2025 to N456.07bn in 2026.
The formula for this stream mirrors the VAT structure: 10 per cent to the Federal Government, 55 per cent to states, and 35 per cent to local governments. This means the Federal Government will collect N45.61bn in 2026, up from N34.33bn in 2025.
States will receive N250.84bn, nearly doubling their previous year’s allocation of N114.43bn. Local Governments are projected to receive N159.62bn in 2026, compared to N80.10bn in 2025.
The rise is attributed to growth in electronic payment channels and the wider adoption of digital financial services, which are driving up transaction volumes and collections.
Projections for 2027 and 2028 suggest continued expansion in stamp duty revenue, reaching N579.82bn and N752.45bn, respectively. Of this, the Federal Government is expected to receive N57.98bn in 2027 and N75.24bn in 2028, while states will get N318.90bn and N413.85bn. Local Governments will be entitled to N202.94bn in 2027 and N263.36bn in 2028.
The new VAT formula and rising stamp duty revenues reflect a broader structural rebalancing of public finance in Nigeria, with states and local governments increasingly positioned as primary beneficiaries of consumption-driven taxes.
The PUNCH earlier reported that the Nigeria Economic Summit Group warned that the Federal Government could face revenue shortfalls if it does not increase the value-added tax rate as part of the ongoing tax reform process.
The Chief Executive Officer of NESG, Dr Tayo Aduloju, made this statement during an interactive media session in Abuja. He emphasised that while reforms to the VAT system are essential, maintaining the current VAT rate without an increase could result in a significant loss of revenue for the government.
Speaking on the issue, Aduloju said, “Without those rate hikes, it means that the government might lose some revenue.” Aduloju explained that the current tax reform process must strike a balance between simplifying the tax system and increasing the VAT rate to maintain revenue stability.
According to him, simply reducing the number of taxes without adjusting the VAT rate could weaken the government’s revenue base.
Also, in its most recent Article IV Consultation Report on Nigeria, the International Monetary Fund noted that although the recent tax reforms approved by the National Assembly and President Bola Tinubu represent a major step forward in modernising the VAT and Company Income Tax regimes, the choice to maintain the current VAT rate would lead to an immediate revenue shortfall.
It stated that the Federal Government may lose as much as 0.5 per cent of the country’s Gross Domestic Product in revenue following its decision not to raise the VAT rate.
“The decision not to raise the VAT rate now is reasonable, given high poverty and food insecurity, and with the cash transfer system to support the most vulnerable households not yet fully rolled out. However, this will reduce consolidated government revenue by up to ½ per cent of GDP in the authorities’ estimates,” the report noted.
According to the Fund, unless alternative financing options are found, subnational governments may be forced to either scale back spending or ramp up their own revenue efforts.
The IMF, however, acknowledged the government’s justification for delaying a VAT hike, particularly at a time of worsening poverty and food insecurity.
Speaking recently at the launch of the BudgIT State of States 2025 Report in Abuja, where he delivered the keynote address, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, projected that states could earn more than N4tn annually from 2026 when new Value Added Tax reforms take effect.
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10 most dangerous places around the world where you might not return alive
Think you’re brave? Think again.....TAP TO CONTINUE READING
From toxic lakes that can turn you into a statue to islands where even setting foot could get you killed, these places aren’t just wild; they’re straight-up nope zones.
We’re talking zero Wi-Fi, zero second chances, and danger levels so high, even your GPS might scream, “Turn back!”
Whether you’re an adrenaline junkie or just love a good doom-scroll, here are the 10 most dangerous places on Earth where going there is risky… But coming back? That’s not guaranteed.
10 Most Dangerous Places Around The World
1. Mount Everest Death Zone (Nepal/Tibet)
Mount Everest Death Zone
One of the most treacherous locations is the death zone on Mount Everest, which lies above 8,000 metres (26,247 feet).
At this altitude, the atmospheric oxygen level is just a third of what we breathe at sea level, causing the human body to deteriorate rapidly.
Climbers suffer from cerebral and pulmonary oedema, extreme fatigue, and organ failure, all while facing bone-chilling temperatures and sudden storms.
Rescue is virtually impossible above 7,000 metres due to thin air that prevents helicopters from operating.
Ground rescues are rare and dangerous, often leading to more fatalities. Over 300 climbers have died in this zone, their bodies serving as chilling landmarks along the route to the summit.
2. Chernobyl Exclusion Zone (Ukraine)
Chernobyl Exclusion Zone
Equally inhospitable is the Chernobyl exclusion zone in Ukraine, the site of the world’s worst nuclear disaster.
The remains of Reactor No. 4 continue to emit deadly radiation, and the infamous “Elephant’s Foot”, a mass of radioactive corium, delivers lethal doses within minutes.
Acute Radiation Syndrome (ARS) caused by exposure leads to vomiting, internal bleeding, and death in weeks.
Even short visits raise cancer risks significantly, as radiation exposure is both invisible and cumulative. Wildlife and vegetation have absorbed radioactive isotopes, turning seemingly harmless environments into hidden hazards.
3. North Sentinel Island (India)
North Sentinel Island
On North Sentinel Island in the Andaman Sea, the danger comes not from nature but from people.
The Sentinelese, one of the world’s last uncontacted tribes, have lived in isolation for over 60,000 years and violently repel any intruders.
In 2018, American missionary John Allen Chau was killed shortly after arriving on the island.
The risk of spreading fatal diseases to the tribe, combined with their lethal resistance, led the Indian government to enforce a strict no-contact policy.
Anyone approaching within three nautical miles faces arrest, and authorities avoid retrieval efforts due to the extreme hostility.
4. Lake Natron (Tanzania)
Lake Natron
Lake Natron in Tanzania is one of the most caustic bodies of water on Earth, with a pH as high as 10.5 due to volcanic chemicals.
Contact with the lake can cause severe chemical burns and blindness. The lake’s red waters emit toxic gases, including hydrogen sulphide, which can induce respiratory failure.
Temperatures in the region can soar above 60°C (140°F), creating an environment where dehydration and heatstroke occur rapidly.
Animal corpses that fall into the lake are preserved through natural mummification, standing as eerie testaments to the lake’s lethality.
5. The Danakil Depression (Ethiopia)
The Danakil depression in Ethiopia is another brutally extreme environment. Sitting below sea level in one of the hottest regions on Earth, daily temperatures often exceed 50°C (122°F).
The region features active volcanoes, sulphur springs, and salt flats, all releasing toxic gases such as sulphur dioxide and chlorine.
The depression lies atop a tectonic triple junction, making earthquakes and sudden ground shifts frequent. Visitors face the combined threats of extreme heat, lethal gases, and unstable ground, with little to no access to rescue or medical support.
6. Death Valley (California, USA)
Death Valley (California, USA
In the United States, death valley in California holds records for some of the highest temperatures ever recorded on Earth.
Summer temperatures routinely rise above 50°C (122°F), causing rapid dehydration and heatstroke.
Vehicles often break down due to overheated engines and melted tyres, leaving travellers stranded in remote areas with no water or cellular service.
Ironically, despite being one of the driest places in the world, death valley is also prone to sudden flash floods, which can turn arid plains into deadly torrents in minutes.
7. Fukushima Exclusion Zone (Japan)
Fukushima Exclusion Zone
Japan’s Fukushima exclusion zone, formed after the 2011 nuclear meltdown, remains hazardous due to lingering radioactive contamination.
The meltdown of three nuclear reactors released radioactive materials that persist in the environment, damaging human tissue and immune systems upon exposure.
Even advanced robots have failed inside the damaged reactor sites due to radiation-induced electronic failures.
The area is largely abandoned, and though some cleanup efforts are ongoing, many parts of the zone remain too dangerous for human or robotic entry.
8. Ciudad Juárez (Mexico)
Ciudad Juárez
Moving from environmental threats to human conflict, Ciudad Juárez in Mexico was once the epicentre of cartel violence.
Located along the U.S. border, it witnessed murder rates surpassing those of active war zones during peak years.
Civilians, journalists, and tourists were frequently caught in the crossfire, and targeted assassinations were common.
Police corruption and fear allowed criminal organisations to operate with impunity, leading to rampant kidnappings, extortion, and mass disappearances.
Though the violence has decreased in recent years, it remains a volatile and high-risk destination.
9. The Sahara Desert (North Africa)
The Sahara Desert
The Sahara desert, stretching across North Africa, is a vast, unforgiving expanse of sand dunes and barren plains.
Navigation is challenging due to featureless terrain and shifting sands that confuse even GPS systems.
Without access to water or shelter, dehydration can claim lives in a single day. Sudden sandstorms, or “haboobs”, can last for hours or days, reducing visibility to zero and causing suffocation from inhaling fine sand particles.
The sheer scale of the desert makes rescue efforts unlikely once someone becomes lost.
10. Drake Passage (Southern Ocean)
Finally, the Drake Passage, the turbulent stretch of sea between South America and Antarctica, is considered the most dangerous nautical crossing in the world.
The convergence of three major ocean currents generates massive waves that can reach 20 metres in height, along with gale-force winds and freezing temperatures.
Ships caught in storms here are at risk of capsizing, and those who fall overboard face hypothermia and death within minutes.
The remote location and harsh conditions make rescue efforts extremely difficult, if not impossible, especially during storms.
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I Considered Otti My Friend, Never Spoke Against Him – Orji Kalu Reveals Reason For Fallout With Abia Gov
The Senator representing Abia North Senatorial District, Orji Uzor Kalu, has vowed to work against the re-election of Abia State Governor, Alex Otti.....TAP TO CONTINUE READING
Speaking on Thursday at his country home in Igbere, Kalu lamented that he once considered Otti his friend and never spoke against him, but was angered by a statement issued by the governor’s Chief Press Secretary, Njoku Okaoha, which criticised him over comments that he would support President Bola Tinubu and deliver Abia State to the All Progressives Congress (APC).
Kalu insisted that his decision to work for the APC should not attract attacks, describing the criticism as unacceptable and accused the governor’s media team of provoking the rift between them.
He said, “I have not for once criticised the state government. For two years, I considered the governor my friend and never spoke against him.
“But three days ago, I saw where the governor’s press secretary issued a statement against me. There is no governor who can deny that whatever his press secretary says reflects his position.
“They fired the first salvo, and I replied by saying that since I am APC, I will work for APC to win. We worked for him to win in 2023, but we are not going to do that again.
“We will work for our party. What is wrong with that? Is that why I should receive insults? I will work for my party.”
The senator also dismissed claims of Otti’s outstanding performance in office, arguing that the governor had not initiated major infrastructure projects but was only rehabilitating roads constructed during his own tenure as governor.
“I don’t know about outstanding performance. What I did in two years as governor is there for everyone to see.
“The money Alex Otti received in four months is what I received in eight years. So, what has he done? He is just repairing and rebuilding the roads I built between 1999 and 2007. I have not seen any new major road,” Kalu added.
He further accused the governor of neglecting rural communities, saying, “As a senator, the roads I am doing in communities are brand-new farmland roads. I have not seen him enter farmland roads. In two years, I had already done what people never believed was possible in Abia State.”
Kalu recalled that during his administration, education and healthcare were free, adding that his achievements earned him praise from former President Olusegun Obasanjo, who reportedly described him as an “action governor.”
He concluded by downplaying social media praise of the current administration, saying governance was not driven by online narratives.
“I don’t know all the noise on social media. This business is not done on social media; it is done at the right time by the people you are seeing here,” he said.
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BREAKING NEWS: Nigerian Street Slangs “Nyash,” “Abeg,” “Biko,” “Mammy Market” and “Ghana Must Go,” Makes Its Way Into Oxford Dictionary
The Oxford English Dictionary (OED) has expanded its vocabulary with the inclusion of several words rooted in Nigerian language and culture, underscoring the country’s growing impact on global English usage.....TAP TO CONTINUE READING
In its December 2025 update released on Wednesday, the dictionary introduced over 500 new words, expressions and meanings. The update also revised more than 1,000 existing entries and traced the origins of familiar terms such as “troll,” “coffee” and “snooker.”
OED editors said the latest additions draw from different varieties of English spoken around the world, including West African, Maltese, Japanese and South Korean English, reflecting the increasing global reach of these linguistic forms.
Among the newly recognised Nigerian expressions are popular everyday words and cultural references such as “nyash,” “abeg,” “biko,” “mammy market” and “Ghana Must Go,” as well as food items like “amala” and “moi moi.”
The update also features “Afrobeats,” which the dictionary defines as a genre of popular music that blends elements of West African rhythms with jazz, soul and funk.
According to the OED, “abeg” functions as an interjection conveying emotions such as surprise, disbelief or frustration, while “biko,” borrowed from the Igbo language, is used to make polite requests or add emphasis, similar to “please.”
“Nyash” is described as a colloquial term referring to a person’s buttocks, particularly a woman’s, while “Ghana Must Go” is defined as the large, colourful, zippered plastic bags commonly used across West Africa. The name traces its history to the 1983 expulsion of undocumented Ghanaian migrants from Nigeria.
The term “mammy market” is recognised as a marketplace traditionally run by women, first associated with military barracks before spreading to youth service camps and educational institutions.
In the culinary category, “amala” is defined as a dough-like meal made from yam, cassava or unripe plantain flour, usually served with soups, while “moi moi” is described as a steamed dish made from blended beans, peppers and onions, with roots in Yoruba cuisine.
The December update builds on a similar expansion in January 2025, when the OED added 20 Nigerian words and expressions, further highlighting the influence of Nigerian English, Pidgin and street slang on the evolving global lexicon.
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