South-west remained the country’s largest contributor to the national value-added tax (VAT) pool in the first half of 2026, accounting for more than half of total collections, while several other geopolitical zones received significantly more in allocations than they generated, according to an analysis of Federation Account Allocation Committee (FAAC) data.

Data compiled by TheCable from FAAC records showed the South-west contributed N2.16 trillion between January and June but received N691.56 billion in VAT allocations, representing 31.99% of its contribution.

The figures highlight the redistributive nature of Nigeria’s VAT-sharing system, under which revenues collected nationwide are pooled and shared among states using a constitutional formula rather than returned solely on the basis of where they were generated.

The South-west’s contribution accounted for nearly 57% of the N3.78 trillion generated by the country’s six geopolitical zones during the six-month period.

The South-south emerged as the second-largest contributor, remitting N880.58 billion into the VAT pool while receiving N429.99 billion, or 48.83% of its contribution.

Together, the South-west and South-south generated more than 80% of Nigeria’s VAT collections in the first half of the year.

The North-central contributed N302.81 billion and received N350.17 billion, equivalent to 115.64% of what it generated.

The North-west generated N205.52 billion but received N384.56 billion, amounting to 187.11% of its contribution.

Similarly, the North-east contributed N152.82 billion and received N285.70 billion, representing 186.95% of the amount it paid into the national VAT pool.

The South-east recorded the lowest contribution among the six zones at N79.27 billion but received N230.89 billion, the equivalent of 291.28% of its contribution, making it the biggest net beneficiary on a percentage basis.

Overall, the six geopolitical zones contributed approximately N3.78 trillion in VAT during the period but received about N2.37 trillion in allocations to states. The difference reflects the statutory distribution of VAT revenue among the federal government, states and local government councils, as well as deductions made before disbursement under FAAC’s allocation framework.

Nigeria’s VAT allocation formula has undergone changes in recent months. Beginning in January 2026, the federal government’s share of distributable VAT revenue was reduced from 15% to 10%, while the share allocated to states increased from 50% to 55%. Local governments retained their 35% share. The revised arrangement also enabled the Federal Capital Territory (FCT) to receive direct allocations from the states’ share for the first time.

The FAAC data also reflect persistent disparities in economic activity across the federation, with Lagos and other commercial centres in the South-west continuing to dominate VAT generation because of their concentration of businesses, manufacturing, financial services and trade.

Previous analyses of FAAC data have consistently shown that only a handful of states contribute more VAT than they receive. In January 2026, for example, Lagos, Oyo, Rivers, Bayelsa and the FCT were the only net contributors after allocations, while the majority of states received more from the VAT pool than they generated.

VAT has become one of Nigeria’s fastest-growing non-oil revenue sources, with monthly distributable VAT revenue fluctuating throughout 2026. FAAC shared N688.79 billion in VAT revenue from May receipts and N740.72 billion from June receipts, underscoring the tax’s growing importance in funding federal, state and local government expenditure.