FG, States projects ₦2.5trn VAT revenue in 2025

NIGERIA- The federal government, together with 21 out of the 36 states in the federation, has projected total Value-Added Tax (VAT) revenue of ₦2.5 trillion for the year 2025 in their respective budget plans.

This comes amid the ongoing discussions surrounding the proposed tax reform bills by President Bola Ahmed Tinubu’s administration.

This projection does not include any extra revenue that might result from the implementation of the contentious tax reform bills.

Value Added Tax (VAT), a consumption tax levied on goods and services, is charged at each point in the supply chain where value is added. Previous reports indicate that VAT revenue collected under the current administration increased by ₦549 billion over a six-month span.

This figure was derived from financial reports released by the Federation Account Allocation Committee between October 2023 and March 2024.

An analysis of the 2025 budget documents from the Federal Government and the 21 states revealed a combined VAT revenue forecast of around ₦2.53 trillion, representing a significant rise of ₦1 trillion (65.8 percent) compared to the ₦1.527 trillion estimated for 2024.

The 21 states included in this forecast are Kebbi, Kaduna, Ekiti, Oyo, Osun, Ogun, Enugu, Borno, Ondo, Kano, Katsina, Ebonyi, Gombe, Anambra, Abia, Niger, Jigawa, Bauchi, Akwa-Ibom, Adamawa, and Delta. Budget documents for the remaining 14 states and the Federal Capital Territory were not accessible.

In 2024, the Federal Government’s share of VAT revenue was ₦512.8 billion, but it is projected to rise to ₦972 billion in 2025.

Similarly, Kebbi State, which received ₦41 billion from VAT in 2024, expects an increase to ₦87.3 billion this year. Kaduna State’s VAT revenue is anticipated to grow to ₦57.8 billion, up from ₦48.2 billion in its 2024 budget.

Ekiti State aims to generate ₦54.9 billion in VAT revenue this year, compared to ₦52.6 billion in 2024. Oyo State, which earned ₦78.8 billion from VAT in 2024, has set a projection of ₦144 billion for 2025, while Osun State expects ₦78.1 billion, an increase from ₦45.3 billion last year. Other states, including Ogun, Enugu, Borno, Ondo, Kano, Katsina, Ebonyi, Gombe.