In Three Months, Manufacturing Sector Remits N330bn in VAT
Nigeria’s manufacturing sector remitted a record N329.59bn in Value Added Tax in the first quarter of 2026, the highest quarterly VAT contribution by the sector in four years and the largest share recorded by any economic activity during the period.
Data released by the National Bureau of Statistics showed that VAT collections from manufacturing rose from N292.12bn in the fourth quarter of 2025 to N329.59bn in Q1 2026, representing a quarter-on-quarter increase of 12.82 per cent.
The figure surpassed the previous quarter’s remittance by N37.47bn and exceeded the sector’s previous peak of N297.68bn recorded in the second quarter of 2025 by 10.72 per cent.
The latest collection also represented a sharp rise from the N112.97bn recorded in the first quarter of 2022, the lowest level in the four years under review.
Compared with that figure, manufacturing VAT remittance has surged by 191.74 per cent, meaning the sector now generates almost three times the VAT revenue it contributed four years ago.
A further analysis of historical NBS data showed that VAT remittances from the manufacturing sector have risen consistently over the past four years. The sector generated N477.43bn in VAT in 2022 before rising by 21.15 per cent to N578.39bn in 2023.
The upward trend accelerated in 2024 as remittances climbed 38.92 per cent to N803.53bn, while 2025 recorded the strongest annual performance, with VAT collections surging 45.30 per cent to N1.17tn.
The Q1 2026 remittance of N329.59bn was not only the highest quarterly contribution in the period under review but also eclipsed the previous record of N297.68bn posted in the second quarter of 2025 by 10.72 per cent.
The third-highest quarterly remittance was recorded in the fourth quarter of 2025 at N292.12bn, underscoring the sector’s strong momentum heading into 2026.
Economic Confidential also found that the average quarterly VAT remittance from manufacturing between the first quarter of 2022 and the first quarter of 2026 stood at N197.44bn. The latest contribution of N329.59bn exceeded that average by N132.15bn, representing a 66.93 per cent increase.
The figures also highlight the scale of growth achieved by the sector over four years. While manufacturers remitted N112.97bn in VAT in the first quarter of 2022, the latest figure is almost three times that amount, reflecting sustained expansion in taxable economic activity and the sector’s growing importance to government revenue generation.
According to the NBS, manufacturing accounted for 29.75 per cent of the N2.42tn VAT generated in the first quarter of 2026, making it the largest contributor among all economic activities.
Information and communication followed with a 20.61 per cent share, while mining and quarrying accounted for 12.32 per cent. The bureau stated that total VAT collection in Q1 2026 increased by 9.98 per cent from N2.20tn in the preceding quarter and rose by 17.06 per cent year-on-year from the corresponding period in 2025.
The NBS added that manufacturing ranked among the fastest-growing sectors in VAT generation during the quarter.
“On a quarter-on-quarter basis, Activities of households as employers; undifferentiated goods- and services-producing activities of households for own use recorded the highest growth rate with 74.36 per cent, followed by Arts, entertainment and recreation with 20.91 per cent, and Manufacturing with 12.82 per cent,” the bureau stated.
This performance comes amid the Organised Private Sector of Nigeria, which includes the Manufacturers Association of Nigeria, recently commending the Federal Government for issuing transition guidelines for implementing the Tax Acts 2025 and for upholding the principle that the new tax laws would not be applied retroactively.
In a public letter published on Monday and signed by the leadership of the OPSN, comprising MAN, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, the Nigeria Employers’ Consultative Association, the Nigerian Association of Small Scale Industrialists, and the Nigerian Association of Small and Medium Enterprises, the group said the government had listened to concerns raised by businesses.
The OPSN said, “Together, we spoke with one voice, stood on common ground, and refused to yield on a matter of fundamental principle: that tax law must operate prospectively, not retroactively.”
The group warned that retrospective implementation of the new tax laws would have disrupted business planning and weakened confidence in the reform process.
“The retroactive application of new tax provisions to completed accounting periods would have created profound uncertainty, distorted financial reporting, frustrated investment decisions, and ultimately undermined the very reform agenda the Tax Acts 2025 seek to advance,” the OPSN stated.
The private sector body also urged businesses to comply fully with the provisions of the new tax regime, noting that the government had acted in good faith by providing clarity on implementation.
“We urge all member companies to engage immediately with their tax advisers, finance teams and legal counsel to confirm the correct tax position for their respective accounting periods and to determine what returns and payments are outstanding,” the OPSN stated.
The group asked companies to file outstanding tax returns promptly, pay all relevant tax payments in full, keep accurate records, and report any technical challenges they encounter while using tax filing platforms.
“Compliance is not merely a legal obligation; it is a statement of confidence in Nigeria’s future. When businesses comply, revenues grow, public services improve, and the investment climate strengthens,” the OPSN stated.
The OPSN also called on the Federal Ministry of Finance and the Nigeria Revenue Service to urgently reconfigure the TaxPro-Max and Rev360 filing platforms and grant deadline extensions to companies affected by system issues that applied provisions of the new tax law to accounting periods that ended before January 1, 2026.