The Federal Government generated ₦25.07 trillion in Value Added Tax (VAT) revenue within six years following the increase of the VAT rate from 5 per cent to 7.5 per cent in 2020.
The figure represents a 722 per cent increase compared to the ₦3.05 trillion realised during the six years preceding the VAT rate adjustment.
According to available data, annual VAT collections grew steadily from ₦1.53 trillion in 2020 to a record ₦8.6 trillion in 2025, reflecting a significant rise in government tax receipts.
Analysts attribute the growth in VAT revenue to a combination of factors, including rising inflation, improved tax administration, stronger compliance by taxpayers, the expansion of the digital economy, and broader tax coverage across sectors.
The increase in the VAT rate has also translated into higher costs for consumers, as Value Added Tax is ultimately paid by the final consumer on taxable goods and services.
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