Nigeria recorded a combined Value Added Tax (VAT) revenue of N1.48 trillion over a two-month period, reflecting sustained consumption activity and improved tax administration despite persistent macroeconomic headwinds.

According to figures released after the Federation Account Allocation Committee (FAAC) meetings for September and October 2025, VAT collections remained a major source of non-oil revenue for the federation. The committee disclosed that N812.593 billion was generated from VAT in September alone. In October, FAAC confirmed that another N670.30 billion accrued from VAT, alongside N47.87 billion from the Electronic Money Transfer Levy (EMTL).

The combined VAT revenue aligns with efforts by the Federal Inland Revenue Service (FIRS) to widen the tax net and enhance compliance across key sectors of the economy. Analysts say the steady VAT inflow indicates that, despite inflationary pressures, consumer spending and business transactions remain active, particularly in telecommunications, manufacturing, and financial services.

During the period under review, FAAC disbursed a total of N2.09 trillion to the federal, state, and local governments for October—slightly lower than the N2.10 trillion shared in September. The October allocation consisted of statutory revenue, VAT, EMTL, and revenue from exchange-rate differentials, with statutory inflows rising by N36 billion.

For September, FAAC shared N2.103 trillion, comprising N812.593 billion from VAT and N51.684 billion from EMTL. The allocations were finalized at FAAC’s October 2025 meeting in Abuja.

Fiscal experts note that VAT will continue to play a critical role in government funding as oil revenues remain volatile. They, however, warn that states must improve transparency in the utilization of their shares to drive economic growth, boost infrastructure, and cushion the effects of rising living costs on households.

With federal and sub-national governments increasingly dependent on VAT, attention is expected to shift toward strengthening enforcement, expanding the tax base, and supporting businesses to sustain productivity.

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