The Federal Government and 21 states have projected a combined VAT revenue of N2.5 trillion for 2025. This figure represents a significant increase compared to previous years, despite ongoing controversies surrounding proposed tax reforms.
Revenue Set to Increase Across Federal Government and States
The Federal Government’s VAT share is projected to rise to N972bn in 2025, up from N512.8bn in 2024. Additionally, 21 states, including Oyo, Kaduna, and Osun, anticipate notable increases in value added tax collections. For instance, Oyo State projects N144bn for 2025, a dramatic jump from N78.8bn in 2024.
VAT Drives Revenue Growth in 21 States
States like Kebbi, Ogun, and Ebonyi have also outlined higher value added tax revenue expectations for 2025. Kebbi projects N87.3bn, compared to N41bn in 2024, while Ogun State anticipates N85bn, up from N57.7bn last year. Ebonyi expects N85.9bn, a considerable rise from N46.9bn in 2024.
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Controversial Tax Reforms May Impact VAT Collections
Although the projected N2.5 trillion excludes potential revenue from proposed tax reform bills, these reforms could further affect value added tax collections. Stakeholders remain divided over the bills’ implications on states’ revenue projections.
Increased VAT Projections Reflect Economic Adjustments
The 65.8% increase in VAT revenue, compared to 2024, reflects efforts to boost internally generated revenues. States like Kano, Anambra, and Delta also expect significant growth in value added tax collections, with Kano projecting N97.3bn, Anambra N92.4bn, and Delta N46.6bn.
