Amid the ongoing debate over proposed tax reform bills by the current administration, the Federal Government, alongside 21 states in the federation, has projected a combined Value Added Tax (VAT) revenue of N2.5 trillion for 2025 in their budget estimates. This forecast does not include potential additional funds from the implementation of the contentious tax reforms.
VAT is a consumption tax applied at each stage of the supply chain where value is added to goods and services. Recent reports indicate that VAT revenue collected under the current administration increased by N549 billion within a six-month period.
An analysis of the budget documents for 2025 from the Federal Government and the 21 states shows a VAT revenue projection of approximately N2.53 trillion, marking a significant increase of N1 trillion (65.8 percent) compared to the N1.527 trillion projected for 2024.
The states included in this projection 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 information from the remaining 14 states and the Federal Capital Territory was not available.
For the year 2024, the Federal Government’s share of VAT revenue was N512.8 billion, with an expected rise to N972 billion in 2025. Kebbi State, which received N41 billion in 2024, anticipates N87.3 billion this year, while Kaduna State forecasts an increase in VAT revenue from N48.2 billion in 2024 to N57.8 billion in 2025.
Ekiti State aims to generate N54.9 billion in VAT revenue, up from N52.6 billion last year. Oyo State forecasts a substantial increase in VAT revenue from N78.8 billion in 2024 to N144 billion in 2025, and Osun State expects to rise from N45.3 billion to N78.1 billion.
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. These figures show notable increases compared to their 2024 projections.
Additionally, Abia, Niger, Jigawa, Bauchi, Akwa-Ibom, Adamawa, and Delta are forecasting 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, significantly higher than their 2024 targets.
