BREAKING: FG, 21 States Projects ₦2.5 Trillion VAT Revenue In 2025

The federal government, along with 21 of the 36 states in the federation, has estimated a collective Value-Added Tax (VAT) revenue of ₦2.5 trillion for the year 2025 in their respective budget proposals.

This development comes amid the ongoing debate regarding the proposed tax reform bills by President Bola Ahmed Tinubu’s administration.

This estimate does not account for any additional revenue that may arise from the implementation of the controversial tax reform bills.

Value Added Tax (VAT), a consumption tax applied to goods and services, is imposed at each stage of the supply chain where value is added.

According to previous reports, VAT revenue collected under the current administration saw an increase of ₦549 billion over a six-month period.

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

An examination of the 2025 budget documents from the Federal Government and the 21 states indicated a combined VAT revenue projection of approximately ₦2.53 trillion, marking a substantial increase of ₦1 trillion (65.8 per cent) compared to the ₦1.527 trillion projected for 2024.

The 21 states included in this projection 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 available.

In 2024, the Federal Government’s share of VAT revenue amounted to ₦512.8 billion, but it is expected to increase to ₦972 billion in 2025.

Likewise, Kebbi State, which received ₦41 billion from VAT in 2024, anticipates an increase to ₦87.3 billion this year.

Kaduna State’s VAT revenue is projected to rise 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 projected ₦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