Nigeria’s FIRS and Customs Collect Record N6.41 Trillion in VAT Between January and September 2025
By Joseph Iyaji | Akahi News
In a major economic milestone, Nigeria’s Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) have collectively generated a staggering ₦6.41 trillion in Value Added Tax (VAT) between January and September 2025, signalling one of the country’s highest-ever tax collection figures within a nine-month period.
The figures, obtained by Akahi News, reveal that FIRS accounted for the bulk of the VAT collections with ₦4.92 trillion, while Customs contributed an impressive ₦1.49 trillion, further demonstrating the growing significance of consumption tax to Nigeria’s fiscal revenue structure.
Breakdown of the 2025 VAT Performance
According to the FIRS data sighted by Akahi News, the monthly breakdown of VAT receipts from January to September 2025 is as follows:
- January: ₦564.61 billion
- February: ₦499.77 billion
- March: ₦492.58 billion
- April: ₦464.50 billion
- May: ₦565.33 billion
- June: ₦524.87 billion
- July: ₦528.62 billion
- August: ₦575.85 billion
- September: ₦698.93 billion
This brings FIRS’s total VAT collection for the first nine months of the year to ₦4.92 trillion, marking a significant improvement from the same period in 2024.
Meanwhile, the Nigeria Customs Service contributed as follows:
- January: ₦207.27 billion
- February: ₦154.69 billion
- March: ₦145.04 billion
- April: ₦177.76 billion
- May: ₦177.49 billion
- June: ₦153.29 billion
- July: ₦159.32 billion
- August: ₦146.77 billion
- September: ₦173.70 billion
This yields a total VAT collection of ₦1.49 trillion by NCS within the same timeframe.
What’s Driving the Surge in VAT Revenue?
Analysts who spoke to Akahi News attribute this record-breaking VAT performance to several factors:
- Exchange Rate Adjustments: The depreciation of the naira against major currencies has naturally inflated VAT values on imported goods, boosting Customs’ share of revenue.
- Improved Compliance and Digitalisation: FIRS’s adoption of advanced digital tax systems and the expansion of e-invoicing platforms have significantly enhanced transparency and enforcement, particularly in the service sector.
- Inflationary Pressures: Rising prices across various goods and services have contributed to higher nominal VAT receipts, though not necessarily implying real growth in consumption.
While these numbers reflect a more robust tax system, Akahi News notes that they also mirror Nigeria’s broader macroeconomic challenges — inflation, currency volatility, and high import costs.
How Should FAAC Spend the N6.41 Trillion?
With the Federal Account Allocation Committee (FAAC) expected to disburse these funds to federal, state, and local governments, economic experts have suggested priority areas that can deliver sustainable impact if properly channelled:
1. Infrastructure Development
Experts believe at least 35% of the revenue should be directed towards road construction, energy supply, and water systems. Nigeria’s decaying infrastructure remains one of the biggest obstacles to investment and productivity. A portion of this record VAT income can significantly reduce infrastructural deficits if transparently managed.
2. Education and Human Capital Investment
A strategic allocation toward education, teacher training, and skills acquisition will boost productivity and reduce unemployment. Given that human capital is the foundation of long-term growth, many argue that FAAC should direct a considerable share of VAT proceeds to this sector.
3. Healthcare and Social Services
The country’s healthcare sector, still recovering from years of underfunding, can benefit immensely from renewed VAT allocations. Strengthening hospitals, primary health centres, and rural clinics could have direct social and economic dividends, particularly for low-income households.
Experts Debate: Growth or Inflation Effect?
While the surge in VAT collection has been widely celebrated, some economists question whether it truly indicates stronger economic activity. Akahi News gathered that experts are divided:
- Optimists argue that the increase shows improved compliance and expanded economic participation — a sign that businesses are now more integrated into formal tax systems.
- Skeptics, however, warn that the bulk of the increase may simply reflect inflationary pressures and currency devaluation, rather than genuine growth in consumption or productivity.
According to economic analyst Dr. Muktar Adeola, “The rise in VAT is impressive but largely nominal. When you adjust for inflation, the real purchasing power of Nigerians has dropped — meaning people are spending more money for fewer goods.”
The Way Forward
As Akahi News reports, the N6.41 trillion VAT collection represents both an opportunity and a challenge for fiscal managers. It shows the potential of Nigeria’s tax system but also highlights the urgent need for efficient public spending.
Stakeholders across sectors have called for transparent tracking of how FAAC distributes and utilises these funds. Civil society organisations insist that without accountability, the benefits of this remarkable revenue growth could easily be lost to mismanagement and corruption.
Citizens’ Voices: How Should Nigeria Spend It?
Public opinion gathered by Akahi News reflects diverse perspectives:
- Some citizens call for increased investment in agriculture and job creation to reduce food inflation.
- Others advocate for power sector reforms, arguing that stable electricity would indirectly boost all other sectors.
- A few insist that government should focus on clearing domestic debts and pension arrears, ensuring fiscal discipline before embarking on new spending.
Final Word
Whether this N6.41 trillion VAT haul represents real growth or inflationary expansion, one fact remains clear — Nigeria has demonstrated stronger tax collection capacity. The question now is how effectively these funds will be used to improve citizens’ lives.
If properly managed, this windfall could mark a turning point for Nigeria’s fiscal future. But if mismanaged, it risks becoming another missed opportunity in the country’s long struggle for economic transformation.
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