Manufacturing tops non‑oil tax revenue with N404 bn from VAT and CIT in Q1 '26

In the first quarter of 2026 (Q1’26), Nigeria’s manufacturing sector reaffirmed its status as a key source of government revenue, collecting N329.59 billion in Value Added Tax (VAT) and N74.48 billion in Company Income Tax (CIT). The combined contribution amounted to N404.07 billion.

Data released by the National Bureau of Statistics (NBS) underscore the sector’s continued importance to the country’s non‑oil revenue base, even as manufacturers face ongoing economic and operational challenges.

VAT collections from manufacturing rose 14.86 percent year‑on‑year to N329.59 billion in Q1’26, up from N286.95 billion in the same period of 2025. The figure also surpassed the sector’s quarterly VAT contributions throughout 2025, highlighting the resilience of manufacturing output and consumption.

Manufacturing accounted for 29.75 percent of the N1.11 trillion generated from local VAT payments during the quarter, making it the largest contributor among all economic sectors.

The sector’s VAT performance has been robust over the past five quarters. Manufacturing generated N286.95 billion in VAT in Q1’25, increased to N297.68 billion in Q2’25, moderated to N290.79 billion in Q3’25, rose slightly to N292.12 billion in Q4’25, and then climbed sharply to N329.59 billion in Q1’26.

Overall, manufacturing contributed N1.17 trillion in VAT revenue in 2025, compared with N803.53 billion in 2024, reflecting the sector’s growing significance in domestic revenue mobilisation.

NBS reported that total VAT collections in Q1’26 stood at N2.42 trillion, a 9.98 percent increase from N2.20 trillion in Q4’25 and a 17.06 percent rise year‑on‑year. Manufacturing posted a quarter‑on‑quarter VAT growth rate of 12.82 percent, ranking among the leading sectors driving the increase.

On the corporate tax front, manufacturing generated N74.48 billion in CIT during the quarter, accounting for 13.82 percent of domestic CIT collections of N538.91 billion. The sector ranked third among the largest contributors to CIT revenue, behind financial and insurance activities and mining and quarrying.

However, CIT contributions from manufacturers fell sharply compared with N107.90 billion recorded in Q1’25 and N141.84 billion in Q4’25, reflecting pressure on corporate profitability amid rising production costs and a challenging business environment.

Overall CIT collections stood at N1.37 trillion in Q1’26, down 8.08 percent from N1.49 trillion in the preceding quarter (Q4’25) and 31.05 percent lower than the level recorded in Q1’25.

The contrasting performance of VAT and CIT suggests that while manufacturing activity and consumer demand remained relatively strong during the quarter, profitability within the sector came under pressure.

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