The Chairman of the Federal Inland Revenue Service (FIRS), Zacch A. Adedeji, has shed light on the significant disparities in Value Added Tax (VAT) distribution across states as part of discussions on the proposed tax reform legislation.
Speaking on the issue, Adedeji revealed the unequal distribution under the current VAT framework, where Lagos State receives the largest share at 42%, followed by Rivers State with 16%, Oyo State at 5.2%, while northern states such as Borno and Bauchi collect just 0.32% and 0.4%, respectively.
The proposed tax reform bill seeks to address these imbalances, aiming to create a more equitable system that reflects the needs of all regions. Adedeji emphasized that the reforms are critical for fostering inclusivity and ensuring fair revenue allocation to support development across the nation.
The proposal is part of broader efforts to overhaul Nigeria’s tax system and enhance fiscal federalism.