The federal government of Nigeria and 21 out of the country’s 36 states are aiming for a combined Value Added Tax (VAT) revenue of N2.5 trillion in 2025, according to their budget projections.
This ambitious figure is based on financial data from the Federation Account Allocation Committee (FAAC) covering October 2023 to March 2024.
An analysis of the 2025 budget documents from the federal government and 21 states reveals a projected VAT revenue of N2.53 trillion, a 65.8% increase (N1 trillion) compared to the N1.527 trillion projected for 2024.
This estimate does not account for additional revenue that could be generated from the implementation of tax reform bills currently under debate.
The 21 states involved in this projection include 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 unavailable.
In 2024, data from FAAC showed that the federal government’s VAT revenue was N512.8 billion. For 2025, this is projected to increase to N972 billion. Similarly, Kebbi State, which received N41 billion in VAT revenue in 2024, expects N87.3 billion this year.
Kaduna State projects a VAT revenue of N57.8 billion, up from N48.2 billion in 2024, while Ekiti State anticipates N54.9 billion in 2025, compared to N52.6 billion last year.
In the southwest, Oyo State, which earned N78.8 billion in VAT revenue in 2024, projects N144 billion for 2025, while Osun State anticipates N78.1 billion, up from N45.3 billion in 2024.
Other states have similarly optimistic projections for 2025:
Ogun: N85 billion (2024: N57.7 billion)
Enugu: N74.9 billion (2024: N44 billion)
Borno: N87.3 billion (2024: N49.4 billion)
Ondo: N71.5 billion (2024: N30.3 billion)
Kano: N97.3 billion (2024: N76.6 billion)
Katsina: N85.9 billion (2024: N46.9 billion)
Ebonyi: N50.8 billion (2024: N36.5 billion)
Gombe: N39 billion (2024: N30 billion)
Anambra: N92.4 billion (2024: N58.4 billion)
Additionally, states like Abia, Niger, Jigawa, Bauchi, Akwa Ibom, Adamawa, and Delta project VAT revenues of N60.6 billion, N64.6 billion, N80 billion, N78.5 billion, N70 billion, N52.5 billion, and N46.6 billion respectively for 2025.
These figures represent substantial increases from their 2024 projections of N40 billion, N50.6 billion, N45 billion, N45 billion, N45 billion, N47 billion, and N45.7 billion, respectively.
This anticipated surge in VAT revenue underscores the federal and state governments’ increased reliance on taxation as a major source of funding for their budgets.
