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Nigeria’s Value Added Tax (VAT) collections rose to N2.42 trillion in the first quarter of 2026, representing a 17.06% increase from the N2.07 trillion generated in the corresponding period of 2025.
This is according to the latest data released by the National Bureau of Statistics (NBS).
The NBS also reported that VAT revenue grew by 9.98% on a quarter-on-quarter basis from N2.20 trillion recorded in the fourth quarter of 2025, reflecting improved tax collections across key sectors of the economy.
Of the total VAT generated during the quarter, local payments accounted for N1.11 trillion, foreign VAT payments contributed N830.47 billion, while import VAT stood at N477.55 billion.
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What the report is saying
According to the NBS, several sectors recorded significant growth in their Value Added Tax (VAT) contributions during the first quarter of 2026, reflecting varying levels of economic activity across the country.
- On a quarter-on-quarter basis, the strongest growth was recorded in activities of households as employers and undifferentiated goods-and-services-producing activities for own use, which surged by 74.36%.
- This was followed by the arts, entertainment and recreation sector, which expanded by 20.91%, while the manufacturing sector posted a robust 12.82% increase in VAT contributions.
Conversely, some sectors experienced notable declines during the period.
- The education sector recorded the sharpest drop, with VAT contributions falling by 31.96%.
- This was closely followed by public administration and defence, including compulsory social security, which declined by 31.38%, while activities of extraterritorial organisations and bodies decreased by 29.89%.
- In terms of overall contribution to VAT revenue, the manufacturing sector maintained its position as the largest contributor, accounting for 29.75% of total collections in the first quarter.
- The information and communication sector followed with 20.61%, underscoring the growing importance of digital and telecommunications services to the economy. Mining and quarrying ranked third, contributing 12.32% of total VAT revenue.
- At the lower end of the spectrum, activities of households as employers and undifferentiated goods-and-services-producing activities for own use accounted for just 0.01% of total VAT collections.
- Activities of extraterritorial organisations and bodies contributed 0.02%, while water supply, sewerage, waste management and remediation activities made up 0.06%.
The figures highlight the continued dominance of manufacturing, telecommunications, and extractive industries in Nigeria’s VAT revenue profile, while also reflecting the uneven pace of growth across different sectors of the economy.
The NBS added that overall VAT collections in Q1 2026 increased by 17.06% compared with the same period of 2025.
Context and background
VAT has emerged as one of Nigeria’s most important sources of non-oil revenue as the government intensifies efforts to diversify its income base and reduce dependence on crude oil earnings.
In June 2025, President Bola Tinubu signed into law four landmark tax reform bills designed to modernise Nigeria’s fiscal and revenue administration framework. The legislation comprises the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill. The new tax laws subsequently came into effect in January 2026, ushering in a new era of tax administration and revenue collection in the country.
The strong VAT performance recorded in the first quarter of 2026 reflects sustained economic activity across key sectors such as manufacturing, telecommunications, and mining.
What you should know
The increase in VAT collections suggests that Nigeria’s non-oil revenue base continues to expand, providing additional resources for government spending and fiscal management.
In March, the federal government rolled out new presumptive tax rules for Micro, Small, and Medium Enterprises (MSMEs) across Nigeria, aiming to simplify compliance and provide a clearer pathway into the formal economy.
