Nigeria recorded N2.06 Trillion VAT Revenue in Q2 of 2025

Between April and June 2025, Nigeria pulled in N2.06 trillion VAT revenue, according to the National Bureau of Statistics. That’s almost exactly what came in the previous quarter—basically flat, down just 0.03%. But year-over-year, it’s a huge leap: up 32% compared to the N1.56 trillion collected in the same period of 2024. What’s driving that steadiness quarter-to-quarter? Growth in foreign and import VAT made up for a minor dip in local collections, which really shows how solid Nigeria’s non-oil revenues are, even with all the economic reforms and inflation headaches going on.

Manufacturing led the way again, making up more than a quarter of VAT revenue. Information and communication wasn’t far behind, and together with mining, those three sectors delivered over 60% of the total. Real estate, though, came out swinging—it grew by a wild 155% quarter-over-quarter. For the first half of 2025, VAT added up to N4.12 trillion. That’s a big chunk of the country’s N14.27 trillion total tax revenue so far, up 43% from last year. Digital tax systems and people spending more are clearly helping, even if some sectors aren’t growing as fast as others.

A bit of background: VAT in Nigeria is a 7.5% tax on most goods and services, collected by the Federal Inland Revenue Service and split between federal, state, and local governments. It started back in 1993, replacing the old sales tax, and now it’s a major non-oil revenue source—about a fifth to a quarter of all tax collected. In 2024, post-pandemic spending and better enforcement pushed VAT collections up 85% to N6.72 trillion. The government’s shooting for N6.95 trillion in 2025, and with new reforms signed by President Bola Tinubu, starting January 2026, they’re hoping it’ll get even easier to pay, fairer, and more effective for funding things like roads and social programs.

Key Figures

Category	Q2 2025 (N trillion)	QoQ Change (%)	YoY Change (%)
Total VAT	2.06	-0.03	+32.15
Local VAT	1.09	-0.91	N/A
Foreign VAT	0.460	+1.14	N/A
Import VAT	0.509	+0.30	N/A

• Local VAT: Primarily from domestic transactions, dipped slightly to N1.09 trillion from N1.10 trillion in Q1.
• Foreign VAT: Rose to N459.95 billion from N454.76 billion, boosted by remittances and international trade.
• Import VAT: Edged up to N508.55 billion from N507.00 billion, reflecting sustained imports of essentials amid naira stabilization efforts.

Sectoral Breakdown and Growth

Manufacturing continued to anchor VAT contributions, underscoring its pivotal role in Nigeria’s industrial base. The top three sectors accounted for over 63% of total VAT.

Top Contributors to Q2 2025 VAT

Sector	Contribution (%)
Manufacturing	27.19
Information and Communication	20.76
Mining and Quarrying	15.04
Wholesale and Retail Trade	~10-12 (est.)
Financial and Insurance Activities	~8-10 (est.)
Activities of Households (Own Use)	0.005 (lowest)

QoQ Sectoral Growth Rates

Real estate’s explosive growth highlights a post-reform housing boom, while laggards like health reflect underinvestment.

Sector	QoQ Growth (%)
Real Estate Activities	+155.21
Agriculture, Forestry, and Fishing	+23.64
Information and Communication	+17.75
Water Supply, Sewerage, and Waste Management	+29.36
Human Health and Social Work	+68.34 (lowest)
Electricity, Gas, and Air Conditioning	+45.20

For comparison, Q1 2025 saw electricity/gas lead at +136.71%, with extraterritorial bodies at a low +35.70%.

Zooming in on Q2 2025, VAT clocked in at N2.06 trillion, right in line with Q1. Not bad, considering inflation hit 34.2% in June. The flat performance follows a bigger jump at the start of the year, when Q1 was up 6% from Q4 2024. Breaking it down: local VAT dropped a tiny bit to N1.09 trillion, foreign VAT rose to almost N460 billion, and import VAT ticked up just slightly to about N509 billion—steady imports and a relatively stable naira seem to have helped.

Manufacturing’s still the backbone for VAT, with information and communication close behind. Mining and quarrying, wholesale/retail trade, and finance also played big roles. At the other end, household activities barely moved the needle.

Looking at sector growth, real estate’s 155% jump suggests a housing market on fire, probably thanks to recent reforms. Agriculture, information/communication, and water management all saw healthy gains too. Health sector VAT grew the least, which points to persistent underfunding.

Quarter-to-quarter, total VAT didn’t budge much, but foreign and import VAT helped balance local declines—maybe Q1’s bump was boosted by Eid spending. Year-over-year, though, the 32% jump is massive, driven by better digital tax tools and a 3.7% GDP boost in the first half. Overall, H1 2025’s VAT haul is 40% higher than last year’s, and total tax revenue is up 43%, with non-oil taxes leading the way.

At this pace, the government looks set to hit its N6.95 trillion VAT target for the year, as long as reforms keep rolling out.

What’s behind these numbers? Digitalization’s made a big difference—FIRS’s TaxPro Max platform helped grow VAT registrations by 20% in the first half, pulling in more businesses, especially from the informal sector. And with the economy growing, people are spending more, which keeps the VAT flowing.

Comparisons and Trends

• QoQ (Q2 vs. Q1 2025): Near stasis at N2.06 trillion, with foreign/import gains cushioning local declines. This stability bucks Q1’s momentum, possibly due to seasonal Eid spending in Q1.
• YoY (Q2 2025 vs. Q2 2024): +32.15% surge from N1.56 trillion, outpacing 2024’s 9.11% QoQ growth. Attributable to enhanced FIRS digital tools and a 3.7% H1 GDP expansion.
• H1 2025 Cumulative: N4.12 trillion (Q1 + Q2), up ~40% YoY from H1 2024’s ~N2.99 trillion (estimated from quarterly data). This forms part of N14.27 trillion total tax revenue for H1, a 43% YoY rise, with non-oil taxes (including VAT) up 44.2%.
• Annual Projection: On track for N6.95 trillion target, implying Q3-Q4 average of N1.415 trillion quarterly, feasible with reform implementation.

Factors Contributing to Performance

• Positive Drivers:
  • Digitalization: FIRS’s TaxPro Max expanded VAT registration by 20% in H1, capturing informal sectors.
  • Consumption Recovery: H1 GDP growth of 3.7% (NBS), led by services (4.2%), spurred VAT from telecoms and retail.
  • Trade Dynamics: Naira appreciation (from N1,600/$ to ~N1,500/$ by June) boosted import VAT.
  • Sectoral Shifts: Real estate boom tied to urban migration; mining VAT from solid minerals push.
• Challenges:
  • Inflation and Purchasing Power: 34.2% inflation eroded real consumption, capping local VAT.
  • Uneven Enforcement: Low contributions from health (68.34% growth but small base) and households indicate compliance gaps.
  • Global Headwinds: Oil price volatility indirectly affected mining VAT.