Nigeria's Value Added Tax (VAT) collections rose to N2.42 trillion in the first quarter of 2026, marking a significant 17.06% increase from the N2.07 trillion generated in the corresponding period of 2025. This data was released by the National Bureau of Statistics (NBS).
The NBS report also indicated a 9.98% growth in VAT revenue on a quarter-on-quarter basis, moving from N2.20 trillion recorded in the fourth quarter of 2025. This growth reflects improved tax collections across key sectors of the economy.
During the first quarter of 2026, local payments accounted for N1.11 trillion of the total VAT generated. Foreign VAT payments contributed N830.47 billion, while import VAT stood at N477.55 billion.
Several sectors showed substantial growth in their VAT contributions. Activities of households as employers and undifferentiated goods-and-services-producing activities for own use saw a surge of 74.36%. The arts, entertainment and recreation sector expanded by 20.91%, and the manufacturing sector posted a 12.82% increase in VAT contributions.
Conversely, some sectors experienced declines. The education sector recorded the sharpest drop with VAT contributions falling by 31.96%. Public administration and defence, including compulsory social security, declined by 31.38%, and activities of extraterritorial organisations and bodies decreased by 29.89%.
The manufacturing sector remained the largest contributor to VAT revenue, accounting for 29.75% of total collections in Q1 2026. The information and communication sector followed with 20.61%, highlighting the increasing importance of digital and telecommunications services. Mining and quarrying ranked third, contributing 12.32% of total VAT revenue.
At the lower end of contributions, activities of households as employers and undifferentiated goods-and-services-producing activities for own use accounted for 0.01% of total VAT collections. Activities of extraterritorial organisations and bodies contributed 0.02%, and water supply, sewerage, waste management and remediation activities made up 0.06%.
These figures underscore the continued dominance of manufacturing, telecommunications, and extractive industries in Nigeria’s VAT revenue profile. They also reflect the uneven pace of economic activity across different sectors.
VAT has become a crucial source of non-oil revenue for Nigeria as the government aims to diversify its income base and reduce reliance on crude oil earnings. In June 2025, President Bola Tinubu signed four tax reform bills into law, which came into effect in January 2026, ushering in a new era of tax administration and revenue collection.
The strong VAT performance in Q1 2026 suggests that Nigeria’s non-oil revenue base is expanding, providing additional resources for government spending and fiscal management.
