Manufacturing Sector Generates N1.17trn VAT in 2025, Remains Top Contributor
By Queen Madaki
Nigeria’s manufacturing sector generated a total of N1.17 trillion in Value Added Tax (VAT) in 2025, reinforcing its position as the largest contributor to government tax revenue.
This is according to the latest data released by the National Bureau of Statistics (NBS).
The figure marks a significant increase from the N803.53 billion recorded in 2024, highlighting the sector’s growing importance to Nigeria’s fiscal landscape.
Despite prevailing economic headwinds, the manufacturing sector has demonstrated strong resilience, sustaining revenue growth and maintaining dominance in VAT contributions.
What the Data is Saying
Breakdown of the NBS data shows that VAT contributions from the manufacturing sector remained relatively stable throughout 2025.
- Q1 2025: N286.95 billion
- Q2 2025: N297.68 billion
- Q3 2025: N290.79 billion
- Q4 2025: N292.12 billion
The total N1.17 trillion represents a sharp increase from N803.53 billion recorded in 2024, where quarterly contributions ranged from N177.17 billion in Q1 to N237.52 billion in Q4.
This steady performance underscores the sector’s ability to sustain revenue generation despite macroeconomic pressures.
Get Up to Speed
Earlier reports show that Nigeria’s manufacturing sector accounted for 8.05% of real Gross Domestic Product (GDP) in 2025, slightly lower than the 8.24% recorded in 2024.
The sector continues to play a critical role in driving Nigeria’s non-oil economy, with industries such as consumer goods, cement production, and industrial materials contributing significantly to output and revenue.
Manufacturing remains central to the country’s economic diversification strategy, helping to reduce reliance on crude oil revenues.
However, operators in the sector continue to grapple with persistent challenges, including high production costs, exchange rate volatility, and infrastructure deficits.
More Insights
Nigeria’s overall VAT performance provides additional context to the manufacturing sector’s contribution.
VAT collections stood at N2.19 trillion in Q4 2025, representing a 3.78% decline from N2.28 trillion recorded in Q3 2025.
Despite the quarterly dip, VAT revenue increased by 12.84% year-on-year, reflecting sustained economic activity.
- Local VAT: N1.16 trillion
- Foreign VAT: N503.13 billion
- Import VAT: N535.73 billion
Earlier in the year, VAT rose to N2.28 trillion in Q3 from N2.06 trillion in Q2, marking a 10.66% increase.
The data reflects a diversified VAT base supported by domestic production, imports, and international transactions.
What You Should Know
Recent policy reforms are expected to further strengthen VAT collection and expand Nigeria’s tax base.
In March 2026, the Federal Government introduced presumptive tax rules targeting Micro, Small, and Medium Enterprises (MSMEs) to improve compliance.
In June 2025, President Bola Ahmed Tinubu signed four major tax reform laws aimed at enhancing tax administration and boosting revenue mobilisation.
These measures are designed to reduce Nigeria’s dependence on oil revenues while strengthening non-oil income sources.