Nigeria’s manufacturing sector generated ₦1.17 trillion in Value Added Tax (VAT) revenue in 2025, according to data released by the National Bureau of Statistics (NBS). The figure represents a notable increase from the ₦803.53 billion recorded in 2024, highlighting the sector’s growing importance to government revenue and its resilience despite challenging economic conditions.
Data from the NBS indicates that VAT contributions from the manufacturing sector remained relatively steady throughout 2025. The sector recorded ₦286.95 billion in the first quarter, which rose slightly to ₦297.68 billion in the second quarter. Contributions moderated to ₦290.79 billion in the third quarter before increasing marginally to ₦292.12 billion in the fourth quarter, bringing the annual total to ₦1.17 trillion. This consistent performance underscores the sector’s ability to maintain strong revenue generation even amid macroeconomic pressures.
Compared with the previous year, the increase in VAT revenue reflects improved activity within the sector. In 2024, VAT contributions from manufacturing totaled ₦803.53 billion, with quarterly figures ranging from ₦177.17 billion in the first quarter to ₦237.52 billion in the fourth quarter. The steady rise recorded in 2024 continued into 2025, further strengthening the sector’s role as the largest contributor to VAT revenue in the country.
Despite this strong tax contribution, the manufacturing sector’s share of Nigeria’s real Gross Domestic Product (GDP) experienced a slight decline. Reports indicate that the sector accounted for 8.05% of real GDP in 2025, compared with 8.24% in 2024. Nonetheless, manufacturing remains a critical driver of Nigeria’s non-oil economy, supporting the country’s ongoing efforts to diversify away from oil dependency. Industries such as consumer goods production, cement manufacturing, and industrial materials have played a significant role in boosting output and tax revenue.
Nigeria’s broader VAT performance provides further context for the sector’s contribution. Total VAT collections reached ₦2.19 trillion in the fourth quarter of 2025, representing a 3.78% decline from ₦2.28 trillion recorded in the third quarter. However, VAT revenue still recorded a 12.84% year-on-year increase, indicating sustained economic activity across different sectors of the economy.
A breakdown of the Q4 2025 VAT revenue shows that local VAT contributed ₦1.16 trillion, while foreign VAT accounted for ₦503.13 billion, and import VAT generated ₦535.73 billion. Earlier in the year, VAT collections rose from ₦2.06 trillion in the second quarter to ₦2.28 trillion in the third quarter, reflecting a significant 10.66% increase during that period. The figures highlight a diversified VAT base supported by domestic production, imports, and international transactions.
Meanwhile, recent fiscal policy reforms are expected to further strengthen VAT collection and broaden Nigeria’s tax base. In June 2025, Bola Ahmed Tinubu signed four major tax reform laws aimed at improving tax administration, compliance, and revenue generation. In addition, the Federal Government introduced presumptive tax rules in March 2026 targeting Micro, Small, and Medium Enterprises (MSMEs) to enhance tax compliance and expand the country’s revenue sources.
Overall, the strong VAT performance from Nigeria’s manufacturing sector reflects its increasing importance to the national economy. Despite persistent challenges such as high production costs, exchange rate volatility, and infrastructure deficits, the sector continues to play a vital role in revenue generation and economic diversification.
