Nigeria Economic Update, Issue 22

In April 2025, the Federation Account Allocation Committee (FAAC) distributed ₦1.7 trillion to Nigeria’s three tiers of government, drawn from a total revenue pool of ₦2.8 trillion available for the month. By tier, the allocation included ₦565 billion to the federal government, ₦556 billion to state governments, and ₦406 billion to local governments, while mineral-producing states received ₦152.6 billion as 13% derivation revenue. Total deductions for collection costs in April stood at ₦101.1 billion, while total transfers, interventions, refunds, and savings amounted to ₦1.07 trillion. Revenue from Value Added Tax (VAT) stood at ₦642.3 billion, representing an increase of ₦4.6 billion from the ₦637.6 billion available in the previous month. The Electronic Money Transfer Levy (EMTL) contributed ₦38.9 billion, distributed as ₦5.8 billion to the federal government, ₦19.4 billion to state governments, and ₦13.6 billion to local governments. The increase in revenue was driven by growth in Petroleum Profit Tax (PPT), Oil and Gas Royalty, EMTL, VAT, Excise and Import duties. However, Company Income Tax (CIT) declined significantly. The rise in VAT and EMTL revenue highlights the growing importance of consumption and digital transaction taxes and signals a potential to rebalance revenue away from overdependence on oil. Therefore, there is a need to expand and improve tax compliance, while reforming CIT frameworks to encourage business formalisation and enhance long-term tax performance.

Download PDF