Manufacturing VAT Surges 54.7% to N875bn in 9 Months as Nigeria’s Industrial Sector Boosts Non-Oil Revenue
Nigeria’s manufacturing sector has significantly boosted Value Added Tax (VAT) revenue, with payments reaching N875.420 billion in the first nine months of 2025. This figure not only surpasses the N566.011 billion collected during the same period in 2024 but also exceeds the total VAT contribution of N578.394 billion for the entire 2023 fiscal year, according to the National Bureau of Statistics (NBS).
A closer look at the numbers shows a 54.7% year-on-year increase in VAT remittances from manufacturers between January and September 2025, reflecting the sector’s growing importance to Nigeria’s non-oil tax base. In absolute terms, this represents an additional N309.409 billion in VAT compared with the same period last year, signaling heightened tax compliance and rising taxable values across the industrial value chain.
Sectoral data from Q3 2025 highlights that manufacturing remains the top contributor to VAT, accounting for 25.89% of total collections, followed by information and communication (18.77%) and mining and quarrying (14.85%). The trend continued from Q1 and Q2, where manufacturing contributed 26.03% and 27.19%, respectively. Analysts attribute the surge partly to higher product prices, rising production costs, and currency depreciation, all of which increased the taxable value of goods.
Despite facing macroeconomic challenges such as high energy costs, foreign exchange volatility, and weak consumer purchasing power, the manufacturing sector continues to play a pivotal role in sustaining Nigeria’s fiscal revenue. Economists note that the spike in VAT underscores the sector’s expanding fiscal significance, especially as the Federal Government increasingly depends on non-oil taxes to fund public services. However, the rise may not directly indicate higher industrial output, as inflation and exchange-rate effects have amplified nominal tax collections.
The Manufacturers Association of Nigeria (MAN) has raised concerns over the heavy VAT burden. Director-General Segun Ajayi-Kadir warned that high tax levels, combined with operational cost pressures, risk reducing competitiveness and potentially leading to job losses. “The high VAT rate makes Nigerian products less competitive locally and internationally,” he said, stressing that the burden often falls on consumers, particularly low- and middle-income earners. MAN continues to advocate for balanced tax policies to protect both manufacturers and consumers.
source: vanguard