More than half of Nigeria’s VAT comes from Lagos, says Kemi Adeosun

Nigeria’s minister of finance Mrs. Kemi Adeosun has hinted that more than half of Nigeria’s value added tax (VAT) comes alone from the nation’s commercial nerve centre, Lagos state.

Speaking at the parley between the federal government and progressive governors forum (PGF) in Abuja on Tuesday, Adeosun said the 87 percent of Nigeria’s VAT is derived from four states and the Federal Capital Territory (FCT).

In other words, only 13 percent of Nigeria’s VAT comes from 32 other states in the federation.

According to her no country in the world with high tax compliance rate is poor, and no rich country has a low tax compliance rate.

“There is no poor country that has a high tax compliance rate, and no rich country that has a low one,” Adeosun said.

Quoting current VAT collection data across Nigeria, the minister said “55% of Nigeria’s VAT is collected in Lagos State. 20% in FCT, 6% in Rivers, 5% in Kano, 1% in Kaduna”.

“I’m hoping that one day Finance Commissioners will stop needing to come to Abuja monthly to share FAAC, because IGR (internally generated revenue) will be sufficient.”

The minister had earlier complained about the country’s abysmal tax-to-GDP ratio, which she said was at six percent, further stating it to be one of the lowest in the world.

Speaking on the topic “The Funding Nigeria Needs,” the minister says the states must do more to generate revenue from with and not solely depend on the federal government for federal allocation.

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