Citizenship News
The Value Added Tax (VAT) collection for the first quarter of 2026 reached an impressive ₦2.42 trillion, representing a 9.98% increase on a quarter-on-quarter basis from the ₦2.20 trillion recorded in Q4 2025.
On a year-on-year basis, VAT collections grew by 17.06%, comprising ₦1.11 trillion in local payments, ₦830.47 billion in Foreign VAT Payments, and ₦477.55 billion in import VAT.
On a sectoral level, manufacturing led the contributions with a 29.75% share, followed closely by information and communication at 20.61% and mining and quarrying at 12.32%.
The steady increase in VAT collections indicates improved tax administration efficiency and increased domestic consumption, amid an inflationary environment.
However, the heavy reliance on manufacturing, ICT, and mining indicates that tax generation remains highly concentrated in that formal economic activity, leaving significant untapped potential in other economic sectors.
Therefore, revenue authorities should broaden tax collection across under-taxed sectors while leveraging technology to curb leakages and improve collection efficiency.
This can be done by intensifying efforts to formalise the informal sector.
This approach would reduce the concentration of the tax burden on a few high-performing sectors and promote more balanced and inclusive economic growth. (Nigeria Economic Update)
