States to get full EMT levy from 2026, chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, announced in Abuja.
He explained that the reform will strengthen state finances and reduce dependence on federal allocations.
States Full EMT Levy
Moreover, the new law exempts state government bonds from tax, lowering borrowing costs and supporting long-term fiscal stability.
For the first time, states will control a significant new revenue stream entirely on their own.
Reducing Federal Dependence
However, many states still rely heavily on federal allocations.
Currently, 21 states depend on Abuja for at least 70% of their revenue.
Some states, like Lagos, Ogun, Kwara, Anambra, and Edo, show fiscal resilience despite national challenges.
Oyedele added that the real test lies in turning revenue windfalls into sustainable growth and shared prosperity.
Additionally, the reforms increase states’ share of VAT, redirecting one-third of funds previously collected by the federal government to the states.
Oyedele urged governors to prioritise investments over salaries and overhead costs.
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He emphasised, “Most states spent less than ₦7,000 per citizen on education and ₦3,500 on healthcare.”
Consequently, citizens remain unskilled, unhealthy, and lack access to basic infrastructure—conditions that stall societal prosperity.
Building Stronger Economies
States that focus on human development and infrastructure tend to climb fiscal performance rankings, while others fall behind.
He called on states to harmonise taxes, digitise collections, and eliminate nuisance levies like bicycle and radio taxes.
Global Director at BudgIT, Oluseun Onigbinde, highlighted that the report ensures every kobo of public money is traceable and accountable.
Currently, 28 of 36 states struggle to pay salaries or fund basic operations.
Meanwhile, inflation rises faster than incomes, and debt grows faster than revenue in most states.
Therefore, the report urges states to build resilient local economies and reduce overreliance on federal allocations.
Transparency has become a competitive advantage; governors now track rankings closely, and citizens’ voices influence decisions.
Finally, Oyedele concluded that states must invest wisely, manage resources effectively, and turn revenue into real benefits for citizens.
