Nigeria’s Federal Government, states, and Local Government Areas (LGAs) received a total of N7.73 trillion in VAT allocations in 2025, up from N6.11 trillion in 2024—a 26.46% increase year-on-year. The figures, released by the Federation Account Allocation Committee (FAAC) and compiled by Nairametrics Research from the Accountant General of the Federation, highlight stronger tax compliance and rising consumer prices across the country.
Of the total allocations, the Federal Government received N1.16 trillion, the states N3.77 trillion, and LGAs N0.71 trillion. Monthly disbursements peaked in October 2025, while December recorded the lowest allocation due to timing differences in VAT remittances rather than reduced economic activity. Analysts note that these figures reflect nominal VAT allocations and improved collection efficiency, rather than a sudden boost in economic output.
While all states benefited from higher VAT receipts, the distribution was heavily skewed toward economically dominant regions. Lagos alone received N459.87 billion, followed by Kano (N148.81 billion), Rivers (N137.38 billion), Oyo (N120.51 billion), and Delta (N101.42 billion). In contrast, states like Taraba (N76.0 billion) and Ebonyi (N76.2 billion) received far less, highlighting ongoing structural imbalances in Nigeria’s consumption-driven revenue base.
VAT allocations to LGAs also reflected regional concentration. Lagos LGAs led with N373.93 billion, while Rivers (N143.7 billion) and Kano (N141.07 billion) followed. At the lower end, LGAs in Gombe (N35.45 billion) and Taraba (N43.35 billion) received the least. This uneven distribution underscores how local fiscal strength is tied closely to urbanization, commercial activity, and industrial hubs.
Overall, the data suggest that VAT collection is becoming more efficient, particularly in urban and industrial centres. However, the reliance on a few high-performing states and cities raises questions about economic inclusivity and long-term fiscal sustainability. Policymakers face the challenge of balancing efficient revenue generation with equitable distribution to address disparities across the country.
source: nairametrics