How more than 50% VAT in Nigeria comes from Lagos -Adeosun

Though many had always known that Lagos State dominates tax generation, but the revelation by the Finance Minister, Mrs. Kemi Adeosun, that more than half of Nigeria’s value added tax (VAT) comes from Lagos state alone took many by surprise .

Adeosun, who was speaking on Tuesday at the parley between the Federal Government and Progressive Governors Forum (PGF) in Abuja, said the 87 per cent of Nigeria’s VAT is derived from only four states and the Federal Capital Territory (FCT).

According to her, only 13 per cent of Nigeria’s VAT comes from 32 other states in the federation.

She said, one of the ways to fight poverty in the land is for all to be tax compliant, adding that no country with high tax compliance rate is poor, while no rich country has a low tax compliance rate.

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

Quoting current VAT collection data across the country, she put the figure as: “55 per cent collected in Lagos State, 20 per cent in FCT, 6 per cent in Rivers, 5 per centin Kano, and 1 per cent 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 also complained about the country’s low tax-to-GDP ratio, which she stated was at 6 per cent, and further stated that it is still one of the lowest in the world.

Speaking on the topic “The Funding Nigeria Needs,” the minister maintained the states should go extra miles to generate revenue from within and not to solely depend on the Federal Government for allocation.

 

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