Nigeria recorded a substantial increase in Value Added Tax (VAT) income in the second quarter of 2025, with total collections rising to N2.06 trillion, up from N1.56 trillion in the same period last year. The figures were released by the National Bureau of Statistics (NBS) in its VAT Q2 2025 report.
The VAT distribution for the quarter shows:
- Local VAT collection: N1.09 trillion
- Foreign VAT collection: N459.95 billion
- VAT from imports: N508.55 billion
Despite the significant annual growth, quarter-on-quarter VAT collection remained relatively flat, slipping by just 0.03% compared with Q1 2025.
Leading VAT-Contributing Sectors in Q2 2025
According to the NBS, three sectors generated the highest VAT revenues during the quarter:
- Manufacturing – 27.19% (N560.11 billion)
- Information and Communication – 20.76% (N427.66 billion)
- Mining and Quarrying – 15.04% (N310 billion)
At the lower end of the spectrum were:
- Household activities: 0.005%
- Water supply, sewerage & waste management: 0.03%
- Extraterritorial organisations and bodies: 0.02%
Sectoral Growth Trends in Q2 2025
Sectors With the Highest Growth (QoQ)
- Real estate activities: 155.21%
- Agriculture, forestry & fishing: 23.64%
- Information and communication: 17.75%
Sectors With the Sharpest Decline (QoQ)
- Human health & social work: -68.34%
- Electricity, gas, steam & AC supply: -45.20%
- Water supply, sewerage & waste management: -29.36%
NBS: VAT Growth Strengthened After Subsidy Removal, FX Reform
The Bureau highlighted that VAT revenue has steadily improved since the elimination of fuel subsidy and the unification of the exchange rate, with sustained growth recorded across all quarters from Q3 2023 onwards.
In Q1 2025, VAT collections hit N2.061 trillion, representing:
- 44.24% YoY increase from Q1 2024
- 6.02% QoQ gain from N1.85 trillion recorded in Q4 2024
Breakdown of Q1 2025 VAT sources:
- Local VAT: N1.10 trillion
- Foreign VAT: N454.76 billion
- Import VAT: N507.00 billion
Major contributing sectors in Q1 mirrored Q2:
- Manufacturing – 26.03% (N536.28 billion)
- Information & Communication – 17.51% (N360.88 billion)
- Mining & Quarrying – 17.02% (N350.78 billion)
Low-performing categories remained household activities and waste management-related services.
Q1 2025 Highest Growth Sectors
- Electricity, gas, steam & AC supply: 136.71%
- Administrative & support services: 45.24%
Conclusion
Nigeria’s VAT performance continues to display resilience and consistent expansion, buoyed by strong contributions from manufacturing, ICT, and mining. With ongoing economic reforms and enhanced compliance efforts, VAT revenues are expected to maintain their upward trajectory throughout 2025.
