The Federal Government, alongside 21 of Nigeria’s 36 states, has projected a combined Value-Added Tax (VAT) revenue of ₦2.5 trillion for 2025, as outlined in their respective budget proposals.
This projection comes amid ongoing debates surrounding President Bola Ahmed Tinubu’s proposed tax reform bills.
Notably, the estimate does not account for additional revenue that could result from the implementation of these controversial reforms. VAT, a consumption tax levied on goods and services, is applied at every stage of the supply chain where value is added.
Reports indicate that VAT revenue under the current administration increased by ₦549 billion over six months, based on financial data published by the Federation Account Allocation Committee (FAAC) between October 2023 and March 2024.
An analysis of the 2025 budget documents from the Federal Government and 21 states reveals a collective VAT revenue target of approximately ₦2.53 trillion, reflecting a significant increase of ₦1 trillion (65.8%) 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 data for the remaining 14 states and the Federal Capital Territory were unavailable.
In 2024, the Federal Government’s VAT revenue was ₦512.8 billion but is expected to increase to ₦972 billion in 2025. Similarly, individual states have projected significant increases:
Other states such as Ogun, Enugu, Borno, Ondo, Kano, Katsina, Ebonyi, and Gombe have also forecasted significant growth in VAT revenues for 2025.
The upward trend in VAT projections underscores the government’s reliance on consumption taxes as a critical revenue source, even as discussions about the potential effects of tax reforms continue.
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