A new FAAC report shows a stark imbalance in how Value Added Tax (VAT) is contributed and redistributed across Nigeria’s geopolitical zones in Q1 2025.
🧾 The Numbers:
Key Takeaways:
South-West, led by Lagos, contributed nearly ₦1 trillion but got back only 28%—the lowest return rate of any region.
South-South, home to oil-rich states like Rivers and Delta, also gave far more than it received, reclaiming just 47% of its contribution.
On the flip side, South-East, North-East, and North-West received well over 200% of what they contributed, with the South-East topping the redistribution chart at 368%.—
Why It Matters:
This VAT flow reveals a federal redistribution model that heavily supports lower-contributing regions while drawing more from Nigeria’s economic engines. While it aligns with Nigeria’s fiscal sharing principles, it raises critical questions around fairness, sustainability, and regional development incentives.
Source: FAAC Report
