Nigeria’s Value Added Tax (VAT) collections rose to N2.42 trillion in the first quarter of 2026, representing a 17.06 per cent increase compared to the N2.07 trillion generated in the same period of 2025, according to the latest figures released by the National Bureau of Statistics.
The report also showed that VAT revenue increased by 9.98 per cent quarter-on-quarter from the N2.20 trillion recorded in the fourth quarter of 2025, reflecting stronger tax collections across major sectors of the economy.
Of the total VAT generated during the period, local transactions accounted for N1.11 trillion, while foreign VAT payments contributed N830.47 billion. Import VAT collections stood at N477.55 billion.
The figures come at a time when the Federal Government is intensifying efforts to boost non-oil revenue following the implementation of sweeping tax reforms that took effect in January 2026.
Data from the NBS showed that the manufacturing sector remained the largest contributor to VAT revenue, accounting for 29.75 per cent of total collections.
The information and communication sector, driven largely by telecommunications and digital services, contributed 20.61 per cent, while mining and quarrying accounted for 12.32 per cent.
Several sectors recorded significant growth in VAT contributions during the quarter. Activities of households as employers and own-use production activities recorded the highest quarter-on-quarter increase of 74.36 per cent. The arts, entertainment and recreation sector followed with growth of 20.91 per cent, while manufacturing posted a 12.82 per cent increase.
However, not all sectors experienced growth. VAT contributions from the education sector fell sharply by 31.96 per cent. Public administration and defence declined by 31.38 per cent, while activities of extraterritorial organisations and bodies dropped by 29.89 per cent.
At the lower end of the spectrum, household employer activities contributed just 0.01 per cent of total VAT collections, while water supply, waste management and remediation activities accounted for only 0.06 per cent.
The increase in VAT collections follows the implementation of four major tax reform laws signed by President Bola Tinubu in June 2025. The reforms, which became operational in January 2026, were designed to modernise Nigeria’s tax administration system, improve compliance and expand government revenue sources.
Analysts believe the strong performance reflects sustained economic activity in key sectors such as manufacturing, telecommunications and mining, alongside improved tax administration mechanisms.
The Federal Government has increasingly relied on VAT and other non-oil taxes to reduce dependence on crude oil earnings and strengthen fiscal sustainability.
While government officials may celebrate the higher revenue figures, the growth in VAT collections is also likely to fuel debate over the increasing tax burden on businesses and consumers already grappling with high inflation, rising energy costs and declining purchasing power.
Industry observers note that a rise in VAT revenue does not automatically translate into economic prosperity. In many cases, it may simply indicate that consumers are paying more for goods and services in an inflationary environment.
The latest figures nevertheless underscore the growing importance of VAT as one of Nigeria’s most reliable sources of government revenue, particularly as authorities continue efforts to broaden the tax net and improve compliance across the economy.
