Nigeria’s tax system leaned heavily on consumption and transaction-based revenues in November 2025, with electronic money transfers, Value Added Tax (VAT) and stamp duties jointly contributing about N612.13 billion to federally collected revenues.

The figure gleaned from a presentation to the Federation Account Allocation Committee (FAAC) this December, represented roughly 45.3 per cent of the N1.35 trillion total collected by the Federal Inland Revenue Service (FIRS) during the month under consideration.

A THISDAY analysis showed that this underscored the growing weight of digitally traceable and consumption-linked taxes in the country’s fiscal structure in 2025.

According to the data, the total collections into the Federation, VAT and Electronic Money Transfer Levy pool accounts stood at N1.35 trillion for the period.

However, although sizable, the outturn fell short of the monthly target of about N1.94 trillion by N590.81 billion, translating to a performance level of 69.6 per cent. Compared with October, collections were also lower, reflecting pressures across several major tax heads.

Within the aggregate performance, VAT remained the single largest contributor among the three focus revenue lines. Total VAT collections in November amounted to N563.04 billion, accounting for about 41.7 per cent of overall revenues, the FAAC data indicated.

The VAT take was driven predominantly by import VAT, which delivered N405.54 billion, while non-import VAT contributed N157.50 billion. The dominance of import VAT meant that roughly 72 per cent of VAT receipts for the month came from imported goods and services, highlighting the continued sensitivity of VAT performance to trade flows, exchange rate dynamics and customs efficiency.

Besides, Electronic Money Transfer Levy (EMTL) collections, which reflect the growing formalisation of financial transactions, reached N43.40 billion in November. This represented about 3.2 per cent of total FIRS collections for the month.

But while modest relative to VAT, the EMT levy has become a stable revenue stream since its introduction, benefiting from the sustained expansion of electronic payments across the banking system.

Its share of total collections also illustrated how fiscal authorities are increasingly capturing value from digital financial activity rather than relying solely on traditional tax bases.

In the same vein, stamp duties, another transaction-based tax, added N5.68 billion in November. Though comparatively small, stamp duty receipts still formed part of the broader pool of consumption and transaction taxes that together delivered more than N612 billion.

On a combined basis, VAT, EMT levy and stamp duties made up just over 45 per cent of total federally collected revenues for the month, reinforcing their central role in Nigeria’s revenue mix.

However, the performance of these taxes stood in contrast to the broader revenue picture. Oil-related taxes, including petroleum profits tax and hydrocarbon tax, generated N407.58 billion in November, representing about 30.2 per cent of total collections.

This was lower than the previous month, with the decline attributed largely to reduced receipts from Production Sharing Contracts (PSCs). Companies income tax and other non-oil taxes, including capital gains tax and stamp duties, together yielded N336.59 billion, equivalent to roughly 24.9 per cent of total collections, but significantly below the monthly target, reflecting a shortfall of over 60 per cent against expectations.

The document showed that in proportional terms, VAT’s 41.7 per cent share of total collections positioned it as the single most important revenue source for the month, ahead of oil taxes and companies income tax.

The combined 45.3 per cent share of VAT, EMT levy and stamp duties underscored a gradual but clear tilt toward taxes linked to consumption, imports and financial transactions. This pattern also aligned with policy efforts aimed at broadening the tax base, improving compliance and reducing excessive dependence on volatile oil revenues.

However, the overall shortfall against the target also pointed to structural and cyclical challenges, as the N1.35 trillion collected in November was about 30.4 per cent below the monthly benchmark, indicating that even strong VAT and transaction tax performance was insufficient to offset weaknesses elsewhere.

The reliance on import VAT also raised questions about sustainability, given exposure to exchange rate movements, import compression and potential shifts in trade policy, highlighting both progress and vulnerability from a fiscal management perspective.

On the one hand, the strong showing of VAT and electronic transfer-related revenues reflected improvements in tax administration, digital monitoring and enforcement.

On the other hand, the modest size of stamp duty receipts and the relatively small contribution of the EMT levy suggested that there remains untapped potential in fully leveraging transaction-based taxes, particularly as Nigeria’s digital economy continues to expand. (This Day)

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