55 per cent of Nigeria’s VAT comes from Lagos- Finance Minister

The Minister of Finance, Mrs Kemi Adeosun, has said that 55 per cent of Nigeria’s Value Added Tax (VAT) comes from Lagos State alone.

The minister stated this during a parley between the Federal Government and Progressives Governors’ Forum (PGF) in Abuja on Tuesday.

She further disclosed that the 87 percent of Nigeria’s VAT is derived from four states and the Federal Capital Territory (FCT).

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”.

The development indicates that only 13 per cent of Nigeria’s VAT comes from 32 other states in the federation.

The finance minister also stated that no country in the world with high tax compliance rate is poor, saying that no rich country has a low tax compliance rate.

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