Nigeria’s Value Added Tax (VAT) collections rose to N2.42 trillion in the first quarter of 2026, reflecting a 17.06% increase compared to the N2.07 trillion recorded in the same period of 2025.
This is according to the latest data released by the National Bureau of Statistics (NBS), which also showed steady improvement in tax performance across key sectors of the economy.
On a quarter-on-quarter basis, VAT revenue increased by 9.98% from N2.20 trillion recorded in the fourth quarter of 2025, indicating sustained momentum in non-oil revenue generation.
The report revealed that of the total VAT generated in Q1 2026, local payments accounted for N1.11 trillion, foreign VAT contributions stood at N830.47 billion, while import VAT totalled N477.55 billion.
Sectoral breakdown showed mixed performance across the economy, with some industries recording strong growth while others experienced declines.
The most significant quarterly growth came from activities of households as employers and undifferentiated goods-and-services-producing activities for own use, which surged by 74.36%. This was followed by arts, entertainment and recreation, which grew by 20.91%, while manufacturing recorded a solid 12.82% increase.
However, several sectors posted declines during the period. The education sector recorded the steepest fall at 31.96%, followed by public administration and defence, including compulsory social security, which dropped by 31.38%. Activities of extraterritorial organisations and bodies also declined by 29.89%.
In terms of overall contribution to VAT revenue, manufacturing remained the largest sector, accounting for 29.75% of total collections. It was followed by information and communication at 20.61%, highlighting the growing influence of digital services in Nigeria’s economy, while mining and quarrying contributed 12.32%.
At the lower end, households as employers contributed just 0.01% of total VAT revenue, while extraterritorial organisations accounted for 0.02%, and water supply, sewerage, waste management and remediation activities made up 0.06%.
The NBS noted that the latest figures underscore the continued dominance of manufacturing, telecommunications, and extractive industries in Nigeria’s tax structure, alongside uneven growth across sectors.
VAT has remained a critical component of Nigeria’s non-oil revenue base as the Federal Government intensifies efforts to diversify income sources and reduce reliance on crude oil earnings.
The growth in collections comes in the wake of major tax reforms introduced by President Bola Ahmed Tinubu in 2025, including four landmark tax bills aimed at modernising Nigeria’s fiscal framework and improving revenue administration.
These reforms, which came into effect in January 2026, have been complemented by additional measures such as new presumptive tax rules for Micro, Small and Medium Enterprises (MSMEs), designed to broaden the tax base and improve compliance.
Analysts say the strong VAT performance in Q1 2026 reflects improved economic activity across key sectors and suggests gradual progress in Nigeria’s ongoing fiscal diversification efforts.
