Nigeria: VAT revenue reached ₦3.6t in 2023, more than 7x the amount generated in 2013
Nigeria's VAT revenue has grown every year since 2013, reaching ₦3.6 trillion in 2023. The amount collected in 2023 exceeded 2022’s by ₦1.13 trillion — a 45% increase.
Nigeria's tax-to-GDP ratio remains significantly lower than regional averages, showing a gap in revenue mobilisation. While OECD countries reached a tax-to-GDP ratio of 34.2% in 2021, and even the African regional average stood at 18.8%, Nigeria's tax revenue represented only 6.7% of its GDP. This disparity emphasises the need for strategic tax policy reforms to strengthen Nigeria’s fiscal capacity.
Nigeria's tax revenue structure relies heavily on corporate income tax, which constitutes 35% of the total revenue, surpassing personal income tax and social security contributions. In contrast, the rest of Africa and OECD countries demonstrate a more balanced tax composition, with significant shares from personal income tax, VAT, and other tax categories.
This heavy reliance on corporate income tax highlights the unique fiscal structure in Nigeria, where other forms of tax contributions are less prominent.
Kenya's Revenue Authority has doubled its revenue, growing from KSh 1.1 trillion in the 2014/15 financial year to KSh 2.2 trillion in 2022/23.
The most significant annual growth occurred in 2021/22, with a 21.7% increase. Over nine years, tax revenue grew by an average of 9.4%, demonstrating consistent progress in Kenya's fiscal management.
In 2022, employees in Lagos, Rivers, and the FCT contributed ₦558.7 billion in PAYE tax, representing over half of the nation's total.
Lagos State alone accounted for ₦360.9 billion.
These figures underscore the tax contributions from Nigeria's key economic regions.
Lagos State led Nigeria’s 2022 PAYE tax collections, surpassing the total of 32 other states combined.
PAYE, a tax on employees’ income, saw Lagos contributing 36%, far ahead of Rivers State (11%) and the FCT (∼9%).
This highlights the economic disparity across states.
Over the years, local companies have contributed more than foreign companies to Nigeria’s total company income tax revenue. In 2023, local CIT payments accounted for 51% of the total, with foreign payments at 49%.
Local CIT payments saw the highest share in 2021 (65%), while foreign CIT's highest was in 2015 at 52%.
