Lagos Leads VAT Contribution as Low-Contributing States Receive Highest Allocations in October 2025
The Federation Accounts Allocation Committee (FAAC) has released the breakdown of Value Added Tax (VAT) contributions and allocations for October 2025, revealing significant disparities between what states contributed to the national VAT pool and what they received.
According to data compiled by Vjsblog, Lagos, Rivers, and Oyo remained the top contributors, while states with some of the lowest VAT inputs received allocations far exceeding their contributions.
Lagos Remains VAT Powerhouse
Lagos State contributed N286.24 billion, representing the highest in the country, but received only N48.96 billion, amounting to just 17.10% of its contribution. Rivers followed with N42.27 billion contributed and N13.99 billion received (33.11%), while Oyo contributed N31.64 billion and received N12.89 billion (40.74%).
Northern and Low-Contributing States Receive Higher Returns
Several states with comparatively low VAT contributions received allocations multiple times higher than what they contributed. For example:
Cross River contributed just N446.02 million, but received N7.73 billion — a massive 1,526.82% return.
Benue contributed N709.14 million and received N7.81 billion (1,101.33%).
Osun, with a contribution of N1.07 billion**, received N7.28 billion (680.37%).
Imo contributed N1.24 billionand received N7.67 billion (618.55%).
Other major beneficiaries include Bauchi (563.01%), Akwa Ibom** (541.55%), Abia (518.05%), Yobe(444.22%), and Borno (392.57%).
States with Balanced Returns
A few states received allocations close to their contribution levels. Kaduna contributed N11.87 billion and received N10.62 billion (89.47%), while Taraba contributed N7.85 billion and received N7.36 billion (93.76%). Edo (85.95%) and Delta (69.81%) also maintained relatively closer balance.
Mid-Tier Contributors Also Receive Higher Allocations
Middle-ranking contributors such as Kwara, Kogi, Ekiti, Ogun, and Anambra all recorded allocations significantly above their contributions, reflecting the national redistribution model embedded within the VAT sharing formula.
A Deepening Debate on Fiscal Federalism
The October 2025 VAT distribution underscores a long-standing controversy about Nigeria’s revenue-sharing structure. States contributing the most continue to receive far less than their input, while many lower-performing states rely heavily on federal allocations for survival.
As discussions around restructuring and fiscal federalism deepen, stakeholders are expected to revisit the fairness and sustainability of the current VAT distribution system.