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n April 2025, the Federation Account Allocation Committee (FAAC) distributed N1.7 trillion to Nigeria’s three tiers of government, drawn from a total revenue pool of N2.8 trillion available for the month. By tier, the allocation included N565 billion to the federal government, N556 billion to state governments, and N406 billion to local governments, while mineral-producing states received N152.6 billion as 13% derivation revenue.
Total deductions for collection costs in April stood at N101.1 billion, while total transfers, interventions, refunds, and savings amounted to N1.07 trillion. Revenue from Value Added Tax (VAT) stood at N642.3 billion, representing an increase of N4.6 billion from the N637.6 billion available in the previous month.
The Electronic Money Transfer Levy (EMTL) contributed N38.9 billion, distributed as N5.8 billion to the federal government, N19.4 billion to state governments, and N13.6 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. (Nigeria Economic Update)
