Nigeria’s manufacturing sector reinforced its role as a major contributor to government revenue in the first quarter of 2026 (Q1’26), generating N329.59 billion in Value Added Tax (VAT) and N74.48 billion in Company Income Tax (CIT), totalling N404.07 billion.
Data obtained from the National Bureau of Statistics (NBS) highlight the sector’s continued importance to Nigeria’s non-oil revenue base despite persistent economic and operating challenges facing manufacturers.
NBS data showed that VAT collections from manufacturing activities rose by 14.86 per cent year-on-year to N329.59 billion in Q1’26 from N286.95 billion recorded in the corresponding period of 2025. The amount also exceeded the sector’s quarterly VAT contributions throughout 2025, underlining the resilience of manufacturing output and consumption.
Manufacturing accounted for 29.75 per cent of the N1.11 trillion generated from local VAT payments during the quarter, making it the largest contributor among all sectors of the economy.
The sector’s VAT performance has remained strong over the past five quarters. Manufacturing generated N286.95 billion in VAT in Q1’25, rising to N297.68 billion in Q2’25 before moderating to N290.79 billion in Q3’25. Collections increased slightly to N292.12 billion in Q4’25 before climbing sharply to N329.59 billion in Q1’26.
Overall, manufacturing contributed N1.17 trillion in VAT revenue in 2025, compared with N803.53 billion in 2024, reflecting the sector’s growing significance in domestic revenue mobilisation.
NBS reported that total VAT collections in Q1’26 stood at N2.42 trillion, representing a 9.98 per cent increase from N2.20 trillion recorded in Q4’25 and a 17.06 per cent rise year-on-year. Manufacturing posted a quarter-on-quarter VAT growth rate of 12.82 per cent, ranking among the leading sectors driving the increase.
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On the corporate tax front, manufacturing generated N74.48 billion in CIT during the quarter, accounting for 13.82 per cent of domestic CIT collections of N538.91 billion. The sector ranked third among the largest contributors to CIT revenue, behind financial and insurance activities and mining and quarrying.
However, CIT contributions from manufacturers declined significantly compared with N107.90 billion recorded in Q1’25 and N141.84 billion in Q4’25, reflecting pressure on corporate profitability amid rising production costs and a challenging business environment.
Overall CIT collections stood at N1.37 trillion in Q1’26, down 8.08 per cent from N1.49 trillion in the preceding quarter (Q4’25) and 31.05 per cent lower than the level recorded in Q1’25.
The contrasting performance of VAT and CIT suggests that while manufacturing activity and consumer demand remained relatively strong during the quarter, profitability within the sector came under pressure.
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