Amid the ongoing debate over the proposed tax reform bills by the current administration, the Federal Government and 21 out of the 36 states in the country have projected a combined Value Added Tax (VAT) revenue of N2.5 trillion for 2025, according to their respective budget estimates.
This projection does not account for any additional revenue that could be generated from the implementation of the controversial tax reform bills.
VAT, a consumption tax imposed on goods and services, is levied at each stage of the supply chain where value is added.
The Telegraph previously reported that VAT revenue collected under the current administration saw an increase of N549 billion over a six-month period, based on financial reports from the Federation Account Allocation Committee between October 2023 and March 2024.
An analysis of the 2025 budget documents from the Federal Government and 21 states reveals a combined VAT revenue projection of approximately N2.53 trillion, marking a significant N1 trillion (65.8%) increase from the N1.527 trillion projected for 2024.
The 21 states included in the analysis 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, along with the Federal Capital Territory, were unavailable.
For 2024, the Federal Government’s share of VAT revenue stood at N512.8 billion, but it is projected to rise to N972 billion in 2025. Kebbi State, which received N41 billion in VAT in 2024, anticipates N87.3 billion in 2025, while Kaduna State projects a VAT revenue of N57.8 billion, up from N48.2 billion in its 2024 budget.
Ekiti State plans to generate N54.9 billion in VAT revenue in 2025, compared to N52.6 billion in 2024. Oyo State, which earned N78.8 billion from VAT in 2024, expects a substantial increase to N144 billion in 2025, while Osun State forecasts N78.1 billion, up from N45.3 billion last year.
Other states, such as Ogun, Enugu, Borno, Ondo, Kano, Katsina, Ebonyi, Gombe, and Anambra, have projected VAT revenues of N85 billion, N74.9 billion, N87.3 billion, N71.5 billion, N97.3 billion, N85.9 billion, N50.8 billion, N39 billion, and N92.4 billion respectively for 2025. These figures represent increases from their 2024 projections, which were N57.7 billion, N44 billion, N49.4 billion, N30.3 billion, N76.6 billion, N46.9 billion, N36.5 billion, N30 billion, and N58.4 billion, respectively.
Similarly, states such as Abia, Niger, Jigawa, Bauchi, Akwa-Ibom, Adamawa, and Delta have projected 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. Their projections for 2024 were N40 billion, N50.6 billion, N45 billion, N45 billion, N45 billion, N47 billion, and N45.7 billion.
This surge in VAT projections underscores a growing optimism in the states’ revenue collection efforts, even as the government continues to navigate the ongoing tax reform discussions.
