Nigeria's foreign Value Added Tax (VAT) collections experienced a substantial surge in the first quarter of 2026, climbing to N830.47 billion. This represents an impressive 83% year-on-year increase compared to the N454.76 billion collected in the same period of 2025.
The National Bureau of Statistics (NBS) data, as analyzed by Nairametrics, indicates that this strong performance is largely attributable to the expansion of the digital economy and improved tax compliance by non-resident service providers operating in Nigeria.
This growth underscores the effectiveness of recent tax reforms aimed at broadening Nigeria’s non-oil revenue streams and enhancing the taxation of cross-border digital transactions. Foreign VAT collections have shown a consistent upward trend over the past five quarters, with Q1 2026 recording the highest quarterly revenue.
The 2025 Nigeria Tax Act has played a crucial role, expanding the country’s digital taxation framework. Under this legislation, all non-resident entities supplying taxable goods and services to Nigeria are mandated to register for tax purposes and charge VAT on eligible transactions.
The Act also clarifies that VAT applies to all taxable supplies made within Nigeria, including goods that are physically present, imported, assembled, or installed in the country, as well as rights and assets beneficially owned or exercisable in Nigeria. Provisions for non-monetary transactions, such as barter arrangements and gifts, also require VAT assessment based on market value.
Fiscal authorities have bolstered enforcement, leading to increased VAT deductions on foreign digital payments. Similar compliance measures have been extended to electronic financial services and digital payment channels, encompassing banking and fintech transactions.
Nairametrics previously reported that total VAT collections for Q1 2026 reached N2.42 trillion, a 17.06% rise from N2.07 trillion in Q1 2025. Foreign VAT has emerged as a significant and fast-growing contributor to Nigeria's non-oil revenue base.
