The Federal Inland Revenue Service (FIRS) has revealed that Value Added Tax (VAT) revenue generated in the southern states of Nigeria significantly exceeded the allocation received by these states from the VAT pool in August 2024.
According to recent data released by the FIRS, the nationwide VAT revenue for August stood at N444.19 billion, with southern states contributing an impressive N387.06 billion, reports Saturday Tribune.
However, despite this significant contribution, the southern states received just N149.09 billion in VAT allocation.
This contrasts sharply with the situation in ten northern states, which contributed a combined N13.69 billion but received a substantial N59.17 billion in allocations.
For instance, Zamfara State, a northern state, contributed only N432.80 million but received N5.65 billion, while Lagos State, which contributed a staggering N249.77 billion, received just N40.22 billion in return.
Nigeria’s proposed tax reform bill, introduced by the Presidential Committee on Fiscal and Tax Reform chaired by Taiwo Oyedele, sparked widespread debate recently.
The reform bill seeks to streamline the tax system by harmonising multiple levies, unifying revenue collection processes, and integrating technology to enhance efficiency. A key proposal is the adoption of the derivation principle for distributing VAT revenues.
Under this principle, VAT revenue would be distributed based on where goods and services are consumed rather than pooled centrally and redistributed.
The Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, clarified the rationale for this shift, emphasising that VAT is fundamentally a consumption tax.
While the proposed reforms aim to ensure fairer revenue distribution, they have faced strong opposition from some northern stakeholders, who argue that the bill undermines the interests of the North and other sub-national entities.
The recent data from the FIRS highlights the disparity in VAT contributions and allocations, with southern states receiving significantly less in allocation compared to their contributions, while some northern states received allocations exceeding their contributions.
Below is a breakdown of VAT contributions and allocations for the southern states in August 2024:
1. South-west
Contributed: N278.52bn
Allocated: N73.09bn
2. South-south
Contributed: N100.38bn
Allocated: N46.97bn
3. South-east
Contributed: N8.16bn
Allocated: N29.03bn
Total Contribution: N387.06 billion
Total Allocation Received: N149.09 billion
FULL LIST: 36 and FCT contributions and allocation from VAT pool in August 2024
Lagos
Contributed: N249.77bn
Allocation: N40.22bn
Rivers:
Contributed: N70.54bn
Allocation: N15.54bn
Oyo:
Contributed: N20.11bn
Allocation: N9.46bn
FCT:
Contributed: N18.17bn
Allocation: N5.34bn
Delta:
Contributed: N13.09bn
Allocation: N7.82bn
Bayelsa:
Contributed: N7.12bn
Allocation: N5.58bn
Kano:
Contributed: N4.65bn
Allocation: 9.71bn
Akwa Ibom:
Contributed: N4.49bn
Allocation: N6.54bn
Anambra:
Contributed: N4.28bn
Allocation: N6.66bn
Edo:
Contributed: N4.05bn
Allocation: N6.08bn
Ekiti:
Contributed: N3.66bn
Allocation: N5.54bn
Borno:
Contributed: N3bn
Allocation: N6.48bn
Kwara:
Contributed: N2.89bn
Allocation: N5.44bn
Adamawa:
Contributed: N2.59bn
Allocation: N5.86b
Plateau:
Contributed: N2.58bn
Allocation: N5.87bn
Benue:
Contributed: N2.56bn
Allocation: N6.47bn
Gombe:
Contributed: N2.55bn
Allocation: N5.38bn
Kogi:
Contributed: N2.43bn
Allocation: N5.91bn
Kaduna:
Contributed: N2.03bn
Allocation: N7.48bn
Ebonyi:
Contributed: N1.90bn
Allocation: N5.20bn
Taraba:
Contributed: N1.88bn
Allocation: N5.27bn
Sokoto:
Contributed: N1.84bn
Allocation: N6.07bn
Osun:
Contributed: N1.81bn
Allocation: N5.91bn
Ogun:
Contributed: N1.74bn
Allocation: N6.08bn
Niger:
Contributed: N1.73bn
Allocation: N6.21bn
Yobe:
Contributed: N1.71bn
Allocation: N5.26bn
Katsina:
Contributed: N1.68bn
Allocation: N7.27bn
Jigawa:
Contributed: N1.59bn
Allocation: N6.42bn
Nasarawa:
Contributed: N1.47bn
Allocation: N4.97bn
Ondo:
Contributed: N1.45bn
Allocation: N5.88bn
Enugu:
Contributed: N1.08bn
Allocation: N5.73bn
Cross River:
Contributed: N1.08bn
Allocation: N5.51bn
Bauchi:
Contributed: N691.28m
Allocation: N6.48bn
Kebbi:
Contributed: N665.17m
Allocation: N5.66bn
Abia:
Contributed: N663.42m
Allocation: N5.43bn
Zamfara:
Contributed: N432.80m
Allocation: N5.65bn
37. Imo
Contributed: N235.41m
Allocation: N6.01bn
Total VAT Generated: N444.19bn
Total Allocation Distributed: N272.29bn
