Why Do VAT and CIT Collections Vary So Widely Across Nigerian States?

Nigeria’s VAT and company income tax figures don’t match population size or economic activity in many states. Big companies often hide revenue by staying unlisted, which cuts tax payers out of the system. Most value-adding businesses operate informally. From hotels and fashion designers to Nollywood and music producers, many prefer to stay off the books. Foreign ownership and poor regulatory enforcement make it harder to capture their due VAT and CIT. When more firms list on the stock exchange and the economic space is well-organized, tax collections should better correlate with state population and economic output. For example, in H1 2026, Lagos led with ₦1.81tn, Rivers followed with ₦560bn and Oyo with ₦254bn. Yet some populous states still lag far behind.

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