May 29, 2025

The Federal Inland Revenue Service (FIRS) has strongly criticized the Federal Capital Territory Administration (FCTA) for shutting down one of its offices in Abuja. The agency described the move as both “malicious” and “unprofessional.” In a statement posted on X (formerly Twitter), Aderonke Atoyebi, Technical Assistant on Broadcast Media to the FIRS Executive Chairman, accused the FCTA of unfairly targeting the agency. “It is highly unprofessional of the Wike-led FCTA to shut down our office and disrupt our staff from carrying out their duties—especially during a pivotal week as we prepare to sign the Tax Reform Bills. FCTA, you’ve made a serious error. FIRS owes you nothing,” Atoyebi stated. She went further to accuse the FCTA of using FIRS as a scapegoat, saying: “If you’re looking for a fall guy, look elsewhere. We will not be your scapegoat, especially when you’re fully aware that your media-spread falsehoods and illegal actions jeopardize our operations.” Atoyebi emphasized that FIRS has no outstanding rent owed to the FCTA, claiming that all dues had been cleared through 2023. “We have the evidence,” she stressed in response to allegations of indebtedness. The timing of the incident is particularly concerning, Atoyebi noted, as it coincides with a critical moment for Nigeria’s tax system, with major reform legislation nearing finalization. She warned that such disruptions could erode public trust and delay the implementation of essential fiscal policies. Analysts have also expressed concern that rising tensions between federal institutions could impair service delivery and cause broader instability. Meanwhile, the National Assembly is moving forward with the harmonization of the Tax Reform Bills. The harmonized version may be passed as early as Tuesday, following a successful reconciliation of contentious sections. James Faleke, Chairman of the House Committee on Finance and head of the harmonization committee, confirmed the development on Sunday via X. He wrote: “The Conference Committee set up by the House and Senate on the Tax Reform Bills has completed its work. The joint team carefully reviewed all sections, resolved grey areas in the four Bills, and addressed all contentious clauses.” It was reported that the FCTA sealed the FIRS office in Abuja due to alleged non-payment of ground rent. Other properties affected by similar actions included an Access Bank branch and a Total filling station in Zone 6, Wuse, Abuja, reportedly over unpaid rent spanning 34 years.

The Federation Account Allocation Committee (FAAC) has released its Value Added Tax (VAT) report for the first quarter of 2025, revealing that Nigeria’s 36 states collectively generated ₦1.5 trillion in VAT revenue. Once again, Lagos State emerged as the top contributor by a wide margin. According to data obtained by Investors King, Lagos alone accounted for ₦819.62 billion—over 54% of the total VAT collected nationwide during Q1. The state’s dominant share reaffirms its status as Nigeria’s economic powerhouse, far outpacing all other states in tax remittances. Rivers State ranked a distant second with ₦278.23 billion, while Oyo State followed in third place, generating ₦79.78 billion during the same period. Top 10 VAT-Contributing States in Q1 2025: These figures highlight the stark disparities in economic activity and taxable transactions among the states, with southern and oil-producing states dominating the upper ranks. Regional Patterns and Observations In general, northern states reported lower VAT returns. Jigawa (₦11.22 billion), Sokoto (₦10.88 billion), and Anambra (₦10.73 billion) were the top contributors from that region. On the opposite end, Taraba (₦2.33 billion), Imo (₦2.34 billion), and Abia (₦2.92 billion) recorded the lowest collections, indicating limited consumption or a narrower tax base. Mid-tier states such as Kaduna (₦8.12 billion), Kogi (₦7.33 billion), and Ogun (₦7.20 billion) posted moderate figures, reflecting their industrial and commercial output. Economic Implications The Q1 data underscores the concentration of economic activity—and consequently, VAT generation—in a handful of states. Lagos and Rivers alone were responsible for over ₦1 trillion, nearly two-thirds of the national total. Fiscal experts warn that this level of revenue centralization raises concerns about equity under Nigeria’s fiscal federalism framework, where VAT collections are pooled and shared among all states regardless of contribution. While the Federal Inland Revenue Service (FIRS) continues its efforts to expand the VAT base, analysts have urged state governments to invest in formalizing their economies, improving tax collection systems, and enhancing compliance to boost their internally generated revenue (IGR). Full State-by-State VAT Breakdown for Q1 2025 (₦ Billion): State VAT Generated Lagos 819.62 Rivers 278.23 Oyo 79.78 Bayelsa 27.26 Kano 22.97 Edo 20.73 Delta 20.04 Akwa Ibom 16.08 Kwara 14.43 Benue 12.36 Jigawa 11.22 Sokoto 10.88 Anambra 10.73 Ekiti 10.17 Adamawa 9.12 Kaduna 8.12 Borno 7.87 Ebonyi 7.43 Kogi 7.33 Ogun 7.20 Ondo 7.14 Nasarawa 7.05 Bauchi 6.30 Niger 5.97 Katsina 5.96 Osun 5.95 Yobe 5.81 Plateau 5.55 Kebbi 5.13 Enugu 4.96 Gombe 4.61 Zamfara 3.77 Abia 2.92 Cross River 2.65 Imo 2.34 Taraba 2.33 Looking Ahead As Nigeria pursues ongoing tax reforms and aims to reduce reliance on oil revenue, state governments face increasing pressure to broaden their tax bases. Digitizing revenue systems and improving tax compliance will be essential for achieving sustainable growth in IGR. In this context, VAT performance continues to serve as a critical barometer of sub-national economic health and administrative capacity. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.