The Nigeria Revenue Service (NRS) collected N3.4trn from the total N6.5trn it collected as Non-import Value Added Tax (TAX) in 2025 from Lagos State.

This was contained in a detailed documents of the Federal Account Allocation Committee (FAAC).

The VAT, also known as local VAT, collected from Lagos made up 52 per cent of what was collected during the year.

Analysis based on geographical zones indicated that South West was the zone the services collected the highest with N3.97trn collected followed by South-South with N1.29trn, the North Central, including VAT from the FCT, was next with 600.3bn.

N8.6trn VAT collected in 2025

A total of N8.6trn was generated as VAT during the year with the NRS collecting N6.5trn as local VAT while the Nigeria Custom Service collected N2.03trn.

Analysis by monthly collection showed that N771.8bn was collected in January but it reduced to N654.4bn in February.

March collection also dropped to N637.6bn but April saw a slight increase to N642.2bn. It further increased by N100bn to N742.8bn in May but dropped to N678.1bn in June.

July saw the collection of N687bn while August’s collection was N722.6bn and an increase to N872.6bn in September.

In October, it was N719.8bn while November saw the lowest collection of N563bn but December saw the highest collection of N913.9bn.

Others include North West with N370.9bn, North East with N201.3bn and South East with N139.7bn

What other states contributed

State analysis showed that Lagos State was followed by Rivers State with the NRS collecting N831.5bn. This is followed by Oyo State with N370.2bn, the Federal Capital Territory with (FCT) with N334.3bn and Bayelsa State with N164.2bn

Next is Kano State with a total of N120.3bn and Delta State with N120bn. Also, N88.1bn was collected from Edo State While N78.9bn was collected from Akwa Ibom.

Kwara State saw the collection of N59.3bn while N57.1bn was collected from Kaduna State and Jigawa State contributed N57bn with Adamawa State contributing N56.4bn.

Niger State contributed N55.4bn to the VAT pool while Anambra State’s Contribution was N44.5bn and Sokoto State contributed N43.4bn. Benue State also contributed N42.1bn while Ekiti State contributed N41.5bn.

The NRS also collected N41.1bn in Plateau State while N40.5bn was collected from Ogun State and Ondo State was N40.3bn.

Nasarawa State contributed N39.9bn while Katsina State contributed N36.2bn and Zamfara State contributed N35bn.

Ebonyi State’s contribution was N34.9bn with Yobe State contributing N34.6bn, Borno State also contributed N31.8bn with Gombe State contributing N31.5bn as Kogi State contributed N28.1bn.

Osun State also contributed N26.5bn while Bauchi State contributed N24.6bn just as Enugu State contributed N22.4bn.

Taraba State contributed N22.2bn while Kebbi State contributed N21.6bn.

Imo State contributed N21bn while Abia State contributed N16.7bn and Cross River State contributed N14.4bn.

How tax reform will reduce Lagos State’s contribution

It would be recalled that the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, had last year said Lagos State will be the biggest loser in ongoing tax reform efforts.

Oyedele explained that the committee’s proposals on Value Added Tax (VAT) were designed to benefit all regions of the country.

President Bola Tinubu had in October 2024 introduced four Tax Reform Bills to the National Assembly, aimed at overhauling Nigeria’s tax system.

The proposed laws – the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill – seek to consolidate existing tax laws, simplify tax administration, and enhance revenue generation.

However, the reforms have faced significant opposition, particularly from stakeholders in the Northern part of the country. The bills were eventually passed by the president and they became effective in January 2026.

But its signing into law has continued to generate controversy over changes in what was gazette and what was passed by the National Assembly.

On how Lagos will lose out, Oyedele was quoted to have said: “The people that put the constitution together pretty much replicated 1979’s. In 1979 there wasn’t VAT. So, in 1999 when they introduced the constitution, VAT was missing, but the government continued to collect VAT.

“Some states like Rivers State and Lagos State are in court saying that VAT should be collected by the state because they feel that they are not getting enough for the contribution they are making into the VAT pot, and therefore if they collect it as a state tax, they will be better off.”

Oyedele noted that Lagos and Rivers States have argued that direct VAT collection would better reflect their contributions. However, he warned that allowing states to collect VAT independently would create chaos for businesses.

“That is the equivalent of 100 per cent derivation. For us, as we’re working on these tax reforms. We said if we get states to start collecting VAT in Nigeria, it will be chaotic for business because we know for a fact that states in Nigeria will not respect input-output,” she said.

According to him, Lagos is the biggest loser in the reform bill because most companies headquartered in the state currently remit their VAT there due to their centralised finance departments.

However, under the reforms, VAT collection would be adjusted to address inequities, redistributing revenue away from Lagos despite its significant contributions.

“What did we identify? As of today, when companies remit their VAT, they tend to remit from their head office because that’s where they have the finance department. So MTN, BUA, Dangote, Airtel, all the banks, most of them are headquartered in Lagos. Some of the oil companies are headquartered in Rivers State.

Daily Trust