The Minister of Finance, Mrs Kemi Adeosun on Tuesday said that 55 per cent of the revenue generated by the Federal Government from Value Added Tax receipts is collected from Lagos State.
Adeosun, according to an online publication-The Cable, said this during a meeting with progressive governors forum.
She explained that the balance of 45 per cent is generated from the remaining 35 states of the Federation and the Federal Capital Territory.
Giving a breakdown of the receipts from VAT, she said while Lagos accounts for 55 per cent of VAT revenue, 20 per cent comes from FCT.
She added that Rivers, Kano and Kaduna accounts for six per cent, five per cent and one per cent respectively.
Cumulatively, she noted that these four states including the FCT account for 87 per cent of the entire collections from VAT
She described the tax compliance rate in the country as very low, adding that this was why the Federal Government is taking proactive steps to improve the rate of voluntary tax compliance.
She said,“There is no poor country that has a high tax compliance rate, and no rich country that has a low one.
“55 per cent of Nigeria’s VAT is collected in Lagos State. 20 per cent in FCT, six per cent in Rivers, five per cent in Kano, one per cent in Kaduna”.
“I’m hoping that one day, Finance Commissioners will stop needing to come to Abuja monthly to share FAAC (Federation Account Allocation Committee) because IGR (Internally Generated Revenue) will be sufficient.”
Based on allocation from FAAC, the Federal Government gets 15 per cent of VAT revenue, while the states and local governments get 50 per cent and 35 per cent respectively.