S’East, N’West, N’East Regions Getting More Allocations From VAT than They Generate

The first quarter of 2025 has seen a significant disparity in the distribution of Value Added Tax (VAT) across Nigeria’s geopolitical regions.

According to recent data, some regions have received substantially more than they contributed, while others have gotten back only a fraction of their contributions.

The South-East region contributed N28.37 billion to the VAT pool but received a whopping N104.50 billion, which is approximately 368% of its contribution. This makes it the region with the highest return on its VAT contribution.

The North-East region followed closely, contributing N30.04 billion and receiving N124.20 billion, which translates to about 345% of its contribution.

The North-West and North-Central regions also received more than they contributed, with returns of 260% and 239% respectively. The North-West contributed N68.05 billion and received N176.74 billion, while the North-Central region contributed N52.70 billion and received N126.16 billion.

In contrast, the South-South and South-West regions, which are among the largest contributors to the VAT pool, received significantly less than they contributed.

The South-South region contributed N364.99 billion but received only N171.19 billion, which is about 47% of its contribution. The South-West region, which contributed the largest amount of N929.87 billion, received a mere N258.19 billion, representing a return of just 28% of its contribution.

These figures have raised questions about the fairness and equity of the VAT distribution formula in Nigeria, with some regions appearing to benefit disproportionately from the pool.

The data is likely to spark debate and discussions about the need for a review of the VAT distribution formula to ensure that all regions receive a fair share of the revenue they generate.