Nigeria’s VAT revenue climbs to N2.3trn in Q3 as collections surge

Nigeria recorded a strong rise in Value Added Tax (VAT) collections in the third quarter (Q3) of 2025, underlining improved economic activity and stronger tax compliance across several sectors. The latest VAT report released by the National Bureau of Statistics (NBS) shows that total collections for the period climbed to N2.28 trillion.

This represents a 10.66 percent increase compared to the previous quarter, when VAT revenue stood at N2.06 trillion. The steady quarter-on-quarter growth reflects expanding taxable transactions within the domestic economy, as well as sustained contributions from foreign and import-related activities.

A closer look at the composition of the revenue shows that local VAT payments formed the largest share, contributing N1.12 trillion during the quarter. VAT from foreign transactions accounted for N680.23 billion, while import VAT generated N479.79 billion. The breakdown highlights the importance of both domestic consumption and cross-border trade to government revenue.

Performance across sectors was mixed but generally positive. Administrative and support service activities recorded the most significant quarter-on-quarter growth, rising by 89.28 percent. Arts, entertainment, and recreation also saw strong expansion at 82.49 percent, while human health and social work activities grew by 32.40 percent, reflecting increased demand and higher taxable turnover in these segments.

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However, not all sectors shared in the gains. Real estate activities experienced the sharpest contraction, declining by 51.33 percent during the period. Activities of households as employers and undifferentiated goods and services-producing activities for own use fell by 36.22 percent, while other service activities dropped by 20.30 percent.

In terms of sectoral contribution to total VAT, manufacturing remained the dominant driver, accounting for 25.89 percent of total collections. Information and communication followed with 18.77 percent, while mining and quarrying contributed 14.85 percent, reinforcing their central roles in Nigeria’s tax base.

At the lower end, activities of households as employers and own-use production made only a marginal contribution of 0.003 percent. Activities of extraterritorial organisations and bodies, along with water supply, sewerage, and waste management, each contributed 0.03 percent.

On a year-on-year basis, VAT collections rose by 28.09 percent compared to the same period in 2024. The robust annual increase signals sustained growth in domestic consumption and business operations, alongside intensified revenue mobilisation efforts by authorities.