Nigeria’s Value Added Tax collections rose to ₦2.28 trillion in the third quarter of 2025, reflecting sustained economic activity across key sectors despite ongoing pressure on households and businesses.

The latest VAT Q3 2025 Report released by the National Bureau of Statistics shows that collections increased by 10.66 percent compared to ₦2.06 trillion recorded in the second quarter of the year. On a year-on-year basis, VAT revenue expanded by 28.09 percent from the same period in 2024, pointing to stronger domestic transactions and improved compliance.

The data suggests that consumption and business activity remain active across major sectors of the economy, even as inflationary pressures continue to affect purchasing power.

A breakdown of the figures shows that local VAT payments accounted for ₦1.12 trillion during the quarter, while foreign VAT contributed ₦680.23 billion. Import VAT added ₦479.79 billion, highlighting the continued role of cross-border trade and imported goods in driving tax revenue.

Sectoral performance reveals a concentration of tax contributions in productive industries. Manufacturing recorded the largest share of VAT at 25.89 percent, underscoring its position as a major pillar of Nigeria’s tax base. Information and communication followed with 18.77 percent, reflecting the expanding digital economy and sustained demand for telecom and data services. Mining and quarrying accounted for 14.85 percent, reinforcing the continued fiscal importance of extractive activities.

Beyond sectoral dominance, growth patterns show sharp expansion in specific service segments. Administrative and support service activities recorded the highest quarter-on-quarter growth rate at 89.28 percent. Arts, entertainment and recreation followed with 82.49 percent, while human health and social work activities expanded by 32.40 percent, suggesting rising demand for both lifestyle and essential services.

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However, not all segments shared in the momentum. Real estate activities recorded the steepest contraction, declining by 51.33 percent. Activities of households as employers and undifferentiated goods and services-producing activities for own use declined by 36.22 percent, while other service activities fell by 20.30 percent. These contractions may reflect weakened household spending power and cautious investment behaviour in property markets.

In terms of sectoral contribution, activities of households as employers and undifferentiated goods and services-producing activities for own use accounted for just 0.003 percent of total VAT, marking the lowest share. Activities of extraterritorial organisations and bodies, alongside water supply, sewerage and waste management, recorded marginal contributions of 0.03 percent each.

The sustained increase in VAT collections signals a broadened tax net and continued transaction flow within the formal economy. For policymakers, rising VAT revenue provides fiscal breathing space at a time when government finances remain under pressure. For businesses, the figures suggest that while certain sectors are struggling, others are expanding rapidly and driving consumption.

The third quarter performance positions VAT as one of the strongest indicators of ongoing economic activity in 2025, even as disparities between sectors highlight uneven recovery across the broader economy.

Meiza Nigeria