Kemi Adeosun, minister for finance, says more than half of Nigeria’s value added tax (VAT) comes from Lagos state alone.
Speaking at the parley between the federal government and progressive governors forum (PGF) in Abuja on Tuesday, Adeosun said the 87 percent of Nigeria’s VAT is derived from four states and the Federal Capital Territory (FCT).
In other words, only 13 percent of Nigeria’s VAT comes from 32 other states in the federation.
According to her no country in the world with high tax compliance rate is poor, and no rich country has a low tax compliance rate.
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“There is no poor country that has a high tax compliance rate, and no rich country that has a low one,” Adeosun said.
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”.
“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.”
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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.
4 comments
Most of the governors don’t declare IGR. They take it and share it with the Chairman of IRS and political god fathers.
This is immature economics. To whom much is given, much is expected. When the federal government directed >50% of investments to Lagos and portharcourt what do you expect? All the oil companies headquatered in Lagos with branch in PH. Now they’re being forced to open head offices in Abuja. VAT, if it is like what we paid in the UK, is value added to the goods tax. If in stattes like Imo, the only federal presence is prisons and post office, what goods will you be charging VAT on? It is immoral to ask a jobless person to pay tax in order to pay salaries to the employed. WE have to be careful when shouting about increasing the IGR. Have we collected the taxes due on all the private jets, armoured SUVs and mansions owned by corrupt politicians?
Federal govt didn’t divert investment purposely to these states,Lagos retained its dominance because it was a formal capital,port/Harcourt because its the base of oil producing state and abuja been the recent capital.as for other states,its so unfortunate that we have governors who are not intelligent enough to create channels for internal generated revenues
God bless you Maxi E….All well said….To whom much is given much is expected.