₦350bn VAT Spike as FG and States Pocket ₦1.969trn

Value Added Tax (VAT) revenue recorded a significant increase of ₦350 billion, as the Federal Government, states, and local governments shared a total of ₦1.969 trillion within the review period, according to official revenue allocation figures.

The rise in VAT collections reflects increased consumption, higher prices of goods and services, and adjustments in tax administration. Analysts note that inflation and rising costs across the economy largely contributed to the surge in VAT revenue, even as many Nigerians struggle with declining purchasing power.

From the shared amount, the Federal Government received its statutory allocation, while states and local governments also got their respective shares to support governance, infrastructure, and service delivery. However, the increase in revenue has renewed public debate over fiscal responsibility and the effective use of public funds.

Despite higher VAT earnings, many states continue to face financial pressure, with challenges ranging from salary payments to funding health care, education, and security. Critics argue that improved revenue must translate into visible development and relief for citizens, especially amid the economic hardship caused by fuel subsidy removal and rising living costs.

Economists warn that while increased VAT revenue strengthens government finances, it also places a heavier burden on consumers, as VAT is ultimately paid by the public. They stress the need for prudent spending, transparency, and policies that balance revenue generation with social protection.

As VAT receipts continue to rise, stakeholders are calling on all tiers of government to ensure accountability and channel increased revenues toward projects that directly improve the welfare of Nigerians and stimulate sustainable economic growth.