“Southeast Contributes N101.09 Billion to VAT, Receives N341.45 Billion in Return”
In 2024, the five Southeastern states of Nigeria made a notable contribution of N101.09 billion to the country’s Value Added Tax (VAT) pool, but they received a far more substantial return of N341.45 billion in allocation, according to data compiled by Agora Policy, a Nigerian think tank.
The Southeastern states’ contributions to the VAT pool were part of the total N6.72 trillion VAT collected nationwide. The Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS) handled VAT collections, with FIRS accounting for a dominant 76.3% of the pool and NCS contributing 23.7%.
The VAT revenue for 2024 saw a significant increase of 85%, rising from N3.64 trillion in 2023 to N6.72 trillion. While Lagos State contributed a dominant 54% of the total non-import VAT, the other 33 states collectively contributed only 19%. Despite contributing less to the overall VAT pool, the Southeastern states benefitted greatly from the allocation formula.
The breakdown of the Southeast states’ VAT contributions and the allocations they received in 2024 is as follows:
- Anambra: Contributed N47.53 billion, received N78.00 billion
- Ebonyi: Contributed N25.11 billion, received N61.43 billion
- Enugu: Contributed N15.40 billion, received N67.54 billion
- Abia: Contributed N8.68 billion, received N63.78 billion
- Imo: Contributed N4.38 billion, received N70.70 billion
In total, the Southeastern states contributed N101.09 billion to the national VAT pool but were allocated an impressive N341.45 billion, over three times their contribution. This allocation highlights the redistributive nature of the VAT sharing system in Nigeria, where less-contributing states can receive a larger share based on the distribution formula.
