Historic N2.5tn VAT Forecast: A Major Economic Development For Nigeria

Historic N2.5tn VAT Forecast: A Major Economic Development For Nigeria

In a significant development amid ongoing discussions on tax reforms, the Federal Government and 21 states out of Nigeria’s 36 are forecasting a combined Value Added Tax (VAT) revenue of N2.5 trillion for 2025. This projection excludes…Historic N2.5tn VAT Forecast: A Major Economic Development For Nigeria

any additional funds expected from the implementation of contentious tax reform bills.

VAT, a consumption-based tax on goods and services, is applied at each stage of the supply chain where value is added.

Sunday ireporteronline previously reported a notable increase in VAT revenue collected under the current administration, rising by N549 billion within just six months—from October 2023 to March 2024.

A review of the 2025 budget estimates for the Federal Government and the 21 states highlights a combined VAT revenue projection of approximately N2.53 trillion. This marks a substantial increase of N1 trillion (65.8%) compared to the N1.527 trillion projected for 2024.

The 21 states 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 details from the remaining 14 states and the Federal Capital Territory are currently unavailable.

In 2024, the Federal Government’s share of VAT revenue was N512.8 billion, projected to rise to N972 billion in 2025. States such as Kebbi anticipate N87.3 billion from VAT, compared to N41 billion in 2024. Kaduna State’s forecast stands at N57.8 billion, up from N48.2 billion in 2024, while Ekiti expects N54.9 billion in 2025, compared to N52.6 billion the previous year.

Oyo State, which earned N78.8 billion from VAT in 2024, has projected an impressive N144 billion for 2025. Similarly, Osun expects a substantial increase from N45.3 billion in 2024 to N78.1 billion this year.

Other states including 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.

This comes in comparison to their 2024 projections of 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.

Additionally, states like Abia, Niger, Jigawa, Bauchi, Akwa-Ibom, Adamawa, and Delta have forecasted 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 a substantial increase from their 2024 projections of N40 billion, N50.6 billion, N45 billion, N45 billion, N45 billion, N47 billion, and N45.7 billion.

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