The South-West remitted ₦341.18B in VAT but received only ₦106.85B, getting back just ₦0.31 for every ₦1 remitted.

Key Takeaways

Lagos carried the South-West VAT burden, remitting ₦305.52B (89.6% of the region's total) but receiving only ₦62.59B (20.5% return), making it the highest net contributor in Nigeria.
Osun had the most disproportionate gain, remitting a mere ₦590M but receiving ₦7.73B, an astronomical 1,211% return—the highest redistribution gain in the South-West.
The entire South-West remitted ₦341.18B but received only ₦106.85B, meaning it got back just ₦0.31 for every ₦1 contributed, highlighting a severe VAT allocation imbalance.
Ondo and Ogun remitted only ₦3.3B but received ₦16B combined, far exceeding their generated VAT, while Lagos alone subsidised most of the allocations across the country.

The South-West stands as Nigeria’s VAT powerhouse, generating a staggering ₦341.18 billion in VAT revenue. However, despite its massive economic contribution, the region received only ₦106.85 billion, translating to a 31% return on its VAT remittance.

The weight of this burden is disproportionately borne by Lagos, which alone remitted ₦305.52 billion, nearly 90% of the entire region’s VAT. Yet, its allocation stood at just ₦62.59 billion (20.5% of its input), making it the single largest net contributor in the country.

Meanwhile, the sharing formula worked wonders for Osun, which remitted just ₦590 million but astonishingly received ₦7.73 billion, a mind-blowing 1,211% gain. Similarly, Ondo (₦990M contribution) and Ogun (₦2.31B contribution) collectively received ₦16B, far exceeding their inputs.

This extreme fiscal sharing raises serious questions about Nigeria’s VAT allocation formula, as revenue generated by high-performing states is disproportionately funneled into lower-contributing states. The South-West, despite its economic strength, remains one of the biggest victims of VAT imbalance, funding allocations across the federation at a shocking scale.

Source:

Federal account allocation committee (FAAC)

<div style="text-align: center;"><a href="https://intelpoint.co/insights/the-south-west-remitted-%e2%82%a6341-18b-in-vat-but-received-only-%e2%82%a6106-85b-getting-back-just-%e2%82%a60-31-for-every-%e2%82%a61-remitted/" title="The South-West remitted ₦341.18B in VAT but received only ₦106.85B, getting back just ₦0.31 for every ₦1 remitted."><img src="https://intelpoint.co/wp-content/uploads/2025/03/South-west-VAT-remmitance-and-sharing-scaled.webp" style="width: 80%; height: auto; max-width:960px;-ms-interpolation-mode: bicubic; margin: 0 auto; display: block;" alt="Chart: The South-West remitted ₦341.18B in VAT but received only ₦106.85B, getting back just ₦0.31 for every ₦1 remitted."/></a><br><span>Find more insights at <a href="https://intelpoint.co/insights?utm_source=Insight%20Embed&utm_medium=HTML&utm_campaign=The+South-West+remitted+%E2%82%A6341.18B+in+VAT+but+received+only+%E2%82%A6106.85B%2C+getting+back+just+%E2%82%A60.31+for+every+%E2%82%A61+remitted." target="_blank" style="color: #4f9acc; text-decoration: none;">Intelpoint</a>.</span></div>Copied to clipboard!

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January 2025

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