VAT Disbursement Rises to ₦551.77bn in February

Value Added Tax (VAT) revenue distributed to Nigerian states rose significantly in February 2026, climbing by more than 30 percent compared to the previous month, according to the latest fiscal data.

The total VAT allocation for February stood at ₦551.77 billion, up from ₦423.25 billion recorded in January, representing a growth of 30.36 per cent month-on-month.

After statutory deductions, net VAT available for distribution was ₦541.89 billion, reflecting stronger tax inflows and improved remittances during the period.

Analysts said the sharp increase points to stronger economic activity across the country, as VAT collections are largely driven by consumer spending and business transactions. Higher collections also suggest improved efficiency in tax administration and compliance.

Lagos State remained the top recipient of VAT revenue in gross terms, receiving ₦111.22 billion, further underlining its position as Nigeria’s commercial hub and largest contributor to economic output.

The rise in VAT receipts is expected to provide much-needed support for state governments as they seek to finance infrastructure, salaries, healthcare, education and other public services. Many states depend heavily on monthly federal allocations to meet recurrent and capital expenditure needs.

Economic experts noted that sustained growth in VAT revenue could ease fiscal pressures on subnational governments and reduce dependence on borrowing, especially at a time when inflation and rising costs continue to strain public finances.

VAT is a consumption tax charged on goods and services, making it a key indicator of spending patterns within the economy. A consistent rise in collections is often seen as a sign of expanding commercial activity and stronger consumer demand.