Policy and Tax Reforms Committee, Mr Taiwo Oyedele, has projected that states could earn more than N4tn annually from 2026, when new Value Added Tax reforms take effect.

Oyedele made this disclosure at the launch of the budget State of States 2025 Report in Abuja, where he delivered the keynote address.

The event also marked the 10th anniversary of the initiative.

He said, “With VAT reforms kicking in from 2026, states’ share will rise to 55 per cent. That could amount to over N4 tn in 2026. The question is: will this money be spent, or will it be invested?”

The fiscal policy expert noted that while recent economic reforms had more than doubled the Federation Account Allocation Committee transfers, from N5.4tn in 2023 to N11.4tn in 2024, many Nigerians were yet to feel any direct relief.

According to him, governments now have more money in their coffers, but households continue to struggle with reduced disposable income.

The BudgIT report highlighted that 21 states still rely on federal allocations for over 70 per cent of their revenues, a trend Oyedele described as worrying.

However, he pointed to examples of progress, including Enugu’s 381 per cent growth in internally generated revenue and Bayelsa’s 174 per cent rise

He explained that the new tax laws, which transfer the full proceeds of electronic money transfer levies to states and exempt state government bonds from tax, would help reduce borrowing costs and create fiscal space.