Nigeria’s Value Added Tax (VAT) collections increased to N2.42 trillion in the first quarter of 2026, representing a 17.06% rise compared with the N2.07 trillion generated in the corresponding period of 2025, according to data released by the National Bureau of Statistics.
The latest figures also showed that VAT revenue grew by 9.98% quarter-on-quarter from N2.20 trillion recorded in the fourth quarter of 2025, indicating stronger tax collections across major sectors of the economy.
Collections Breakdown
A breakdown of the Q1 2026 collections revealed that local VAT payments contributed N1.11 trillion, while foreign VAT payments accounted for N830.47 billion. Import VAT generated N477.55 billion during the period.
The statistics highlight continued growth in Nigeria’s non-oil revenue base amid ongoing efforts by the government to improve tax administration and reduce dependence on crude oil earnings.
Sectoral performance
The NBS data showed mixed performance across sectors, with some industries recording substantial increases in VAT contributions while others experienced declines.
On a quarter-on-quarter basis, activities of households as employers and undifferentiated goods-and-services-producing activities for own use recorded the highest growth, rising by 74.36%
The arts, entertainment and recreation sector followed with a 20.91% increase, while the manufacturing sector posted a strong 12.82 per cent growth in VAT contributions.
However, the education sector recorded the sharpest decline, with VAT contributions falling by 31.96% during the quarter.
Public administration and defence, including compulsory social security activities, declined by 31.38%, while activities of extraterritorial organisations and bodies dropped by 29.89 per cent.
Manufacturing remains top contributor
Manufacturing retained its position as the largest contributor to VAT revenue, accounting for 29.75 per cent of total collections in the first quarter of 2026.
The information and communication sector ranked second with a 20.61% contribution, underscoring the growing role of digital services and telecommunications in the economy.
Mining and quarrying emerged as the third-largest contributor, accounting for 12.32% of total VAT revenue.
At the opposite end of the spectrum, activities of households as employers and undifferentiated goods-and-services-producing activities for own use contributed just 0.01% of total VAT collections.
Activities of extraterritorial organisations and bodies accounted for 0.02%, while water supply, sewerage, waste management and remediation activities contributed 0.06%.
Tax reforms begin to take effect
The strong VAT performance comes months after President Bola Tinubu signed four major tax reform bills into law in June 2025. The reforms, which took effect in January 2026, include the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill and the Joint Revenue Board (Establishment) Bill.
The Federal Government has also introduced new presumptive tax rules for Micro, Small and Medium Enterprises (MSMEs) as part of efforts to simplify compliance and expand participation in the formal economy.
