In the Value Added Tax (VAT) collections report released by the Federation Account Allocation Committee (FAAC) for Q1 2025, the 36 states generated a combined N1.5 trillion VAT with Lagos State once again emerging as the dominant contributor.
According to the FAAC breakdown obtained by Investors King, Lagos accounted for a staggering N819.62 billion, representing more than 54 percent of the total VAT generated in the country during the first quarter of the year.
The state maintained its long-standing position as Nigeria’s economic nerve centre, far outperforming other states in VAT remittance.
Rivers State followed distantly with N278.23 billion, while Oyo State ranked third, generating N79.78 billion within the same period.
The top ten VAT-generating states are as follows:
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Lagos – N819.62 billion
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Rivers – N278.23 billion
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Oyo – N79.78 billion
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Bayelsa – N27.26 billion
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Kano – N22.97 billion
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Edo – N20.73 billion
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Delta – N20.04 billion
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Akwa Ibom – N16.08 billion
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Kwara – N14.43 billion
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Benue – N12.36 billion
These figures underscore the vast disparities in economic activity and taxable transactions across the states, with southern and oil-producing states dominating the upper tier of the list.
Regional Trends and Observations
Northern states generally reported lower VAT figures, with Jigawa (N11.22bn), Sokoto (N10.88bn), and Anambra (N10.73bn) among the highest contributors in that region. Meanwhile, states such as Taraba (N2.33bn), Imo (N2.34bn), and Abia (N2.92bn) posted the lowest collections nationwide, pointing to weaker consumption volumes or a narrow tax base.
Mid-ranking states such as Kaduna (N8.12bn), Kogi (N7.33bn), and Ogun (N7.20bn) also saw moderate inflows, with VAT performance reflecting their level of commercial and industrial activities.
Economic Implications
The Q1 VAT figures reinforce the economic concentration in a few states, particularly Lagos and Rivers, which jointly generated over N1 trillion, or nearly two-thirds of total VAT revenue within the period.
Fiscal analysts argue that the growing centralization of VAT collections in a few states raises questions about the equity of Nigeria’s fiscal federalism, especially under the existing structure where VAT revenue is pooled and redistributed across all states.
While the Federal Inland Revenue Service (FIRS) continues its push to expand the VAT base, experts have called for state governments to invest in economic development and formalization of local markets to improve their fiscal performance.
Complete VAT Breakdown by State in Q1 2025:
| State |
VAT Generated (₦ Billion) |
| Lagos |
819.62 |
| Rivers |
278.23 |
| Oyo |
79.78 |
| Bayelsa |
27.26 |
| Kano |
22.97 |
| Edo |
20.73 |
| Delta |
20.04 |
| Akwa Ibom |
16.08 |
| Kwara |
14.43 |
| Benue |
12.36 |
| Jigawa |
11.22 |
| Sokoto |
10.88 |
| Anambra |
10.73 |
| Ekiti |
10.17 |
| Adamawa |
9.12 |
| Kaduna |
8.12 |
| Borno |
7.87 |
| Ebonyi |
7.43 |
| Kogi |
7.33 |
| Ogun |
7.20 |
| Ondo |
7.14 |
| Nasarawa |
7.05 |
| Bauchi |
6.30 |
| Niger |
5.97 |
| Katsina |
5.96 |
| Osun |
5.95 |
| Yobe |
5.81 |
| Plateau |
5.55 |
| Kebbi |
5.13 |
| Enugu |
4.96 |
| Gombe |
4.61 |
| Zamfara |
3.77 |
| Abia |
2.92 |
| Cross River |
2.65 |
| Imo |
2.34 |
| Taraba |
2.33 |
Looking Ahead
With ongoing tax reform efforts and renewed focus on boosting non-oil revenues, state governments are under increasing pressure to broaden their tax base, digitize their revenue collection processes, and strengthen compliance to tap into more sustainable internally generated revenue (IGR) sources.
As the country continues to navigate complex fiscal challenges, VAT generation remains a critical metric for assessing the economic vitality and administrative efficiency of sub-national governments.
