Minister of Finance, Mrs. Kemi Adeosun, has said that more than half of Nigeria’s value added tax, VAT, comes from Lagos State alone.
According to her, 87 percent of Nigeria’s VAT was derived from four states and the Federal Capital Territory.
The minister who spoke at meeting between the Federal Government and Progressive Governors Forum in Abuja, on Tuesday said also that only 13 percent of Nigeria’s VAT came from 32 other states in the federation.
She said that no country in the world with high tax compliance rate is poor, and no rich country has a low tax compliance rate. “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 was collected in Lagos State; FCT, 20%; Rivers, 6%; Kano, 5%; and Kaduna, 1%. She said: “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, describing it as one of the lowest in the world. Speaking on the topic “The Funding Nigeria Needs,” the minister said states must do more to generate revenue from within and not solely depend on the federal government for allocation.
