The five Southeastern states of Nigeria collectively contributed N101.09 billion to the national Value Added Tax (VAT) pool in 2024, while receiving a significantly higher allocation of N341.45 billion. This represents approximately 3.38 times their contributions, highlighting the revenue-sharing formula’s impact on the region.

Data from Agora Policy, a Nigerian think tank, revealed that the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS) collected a total of N6.72 trillion in VAT in 2024. The FIRS accounted for 76.3% of the total, collecting N5.13 trillion, while the NCS contributed N1.59 trillion, representing 23.7%.

 

Lagos State emerged as the highest contributor, generating 54% of the total non-import VAT, while the remaining 33 states.

The Southeastern region’s VAT contribution amounted to only a fraction of the national total, yet it received substantial allocations under Nigeria’s revenue-sharing framework. Below is a breakdown of contributions and allocations for each state in the South-East:

 

1. Anambra

• Contribution: N47.53bn

• Allocation: N78.00bn

2. Ebonyi

• Contribution: N25.11bn

3. Enugu

• Contribution: N15.40bn

• Allocation: N67.54bn

4. Abia

• Contribution: N8.68bn

• Allocation: N63.78bn

5. Imo

• Contribution: N4.38bn

• Allocation: N70.70bn

Total Contribution: N101.09bn

Total Allocation Received: N341.45bn

Official figures indicated that VAT revenue increased by 85% year-on-year, rising from N3.64 trillion in 2023 to N6.72 trillion in 2024. Despite their modest contributions, the Southeastern states benefited considerably from the redistribution, receiving a combined allocation that far exceeded their input.

This dynamic underscores the principles of fiscal federalism, where revenue is pooled at the national level and redistributed to support equitable development across the country.