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:
- Lagos – ₦819.62 billion
- Rivers – ₦278.23 billion
- Oyo – ₦79.78 billion
- Bayelsa – ₦27.26 billion
- Kano – ₦22.97 billion
- Edo – ₦20.73 billion
- Delta – ₦20.04 billion
- Akwa Ibom – ₦16.08 billion
- Kwara – ₦14.43 billion
- Benue – ₦12.36 billion
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.
