Nigeria generated a total of ₦2.06 trillion in Value Added Tax (VAT) in the second quarter of 2025, according to the latest report released by the National Bureau of Statistics (NBS). The figure represents one of the highest quarterly VAT collections recorded in recent years, signalling improved tax compliance and increased economic activity across major sectors.
The NBS report indicates that both local VAT payments and foreign VAT collections contributed significantly to the revenue. Key contributors included manufacturing, telecommunications, financial services, and wholesale and retail trade — sectors that have seen sustained expansion despite ongoing macroeconomic challenges.
Analysts say the sharp rise in VAT revenue may be linked to better enforcement by the Federal Inland Revenue Service (FIRS), expansion of the taxpayer net, and the continued shift toward digital transactions, which are easier to track and tax. The growth also aligns with the government’s renewed push to improve non-oil revenue generation as part of broader fiscal reforms.
However, economic experts warn that the increase in VAT revenue does not necessarily reflect improved living standards, noting that high inflation may have pushed up prices of goods and services, thereby yielding higher VAT collections. They advise the government to pair revenue growth with policies that ease the cost-of-living burden on households and small businesses.
The NBS VAT report is expected to play a key role in federal revenue projections as the government intensifies preparations for the 2026 budget cycle.
