The Abia State Government has dismissed claims that its low ranking in Value Added Tax (VAT) collection reflects poor economic performance, insisting that the figures have been misinterpreted and do not capture the true state of the economy.
Reacting to the National Bureau of Statistics (NBS) VAT report for January to June 2026, which ranked Abia last in VAT collections, the state’s Chief Press Secretary, Ctz. Ukoha Njoku Ukoha, said critics were deliberately using the data to create a false impression that the state was experiencing no economic growth under Governor Alex Otti’s administration.
In a statement issued on Wednesday, Ukoha argued that VAT remittances are based on where companies are registered and file their taxes, rather than where goods are produced or consumed. He explained that states hosting corporate headquarters, such as Lagos, the Federal Capital Territory and Rivers, naturally record higher VAT collections.
According to him, Abia’s economy is driven largely by manufacturing, trade and small businesses operating within the informal sector, making VAT collections an inadequate measure of the state’s economic productivity.
He further noted that much of the commercial activity in Aba involves goods that attract VAT at ports or in other states before they reach Abia markets, adding that this also affects the state’s VAT profile.
The government accused the immediate past Commissioner for Finance of attempting to use the report for political attacks despite previously dismissing NBS data when it ranked Abia among the best-performing states in public debt reduction and capital expenditure.
Defending the administration’s economic policies, Ukoha said Governor Otti had cleared outstanding salary and pension arrears inherited from previous administrations and had commenced plans to settle more than N60 billion in accumulated gratuities owed since 2001.
He also highlighted the implementation of the N70,000 minimum wage, the recruitment of over 5,000 teachers and more than 800 health workers, as well as ongoing road, power and market infrastructure projects aimed at boosting economic activities across the state.
According to the government, the Abia Internal Revenue Service (ABIRS) has launched a formalisation and digitalisation programme targeting 200,000 small and medium-scale enterprises before the end of 2026 to expand the tax base without stifling businesses.
The statement added that a Joint VAT Monitoring Taskforce had been established with the Federal Inland Revenue Service (FIRS) to ensure VAT generated from transactions conducted in Abia is properly credited to the state.
Using the Akwete Weaving Cooperative Society and Aba’s thriving shoe, garment and fabrication industries as examples, the government maintained that much of Abia’s productive capacity remains within the informal economy and is therefore not fully reflected in VAT statistics.
It stressed that the true indicators of economic performance should include functioning industries, regular salary payments, improved infrastructure, electricity supply and vibrant markets, insisting that these indicators show the state is making steady progress.
The government concluded that while it welcomes constructive, data-driven criticism, it would continue to challenge what it described as misleading interpretations of economic statistics, maintaining that VAT figures alone cannot define the overall performance of Abia’s economy.