Nigeria’s manufacturing sector saw a remarkable surge in Value Added Tax (VAT) contributions in 2025, with payments reaching N875.42 billion in the first nine months of the year. This marks a 54.7% increase over the N566.01 billion recorded in the same period of 2024 and already surpasses the entire 2023 VAT contribution of N578.39 billion.
The jump reflects higher tax remittances across the industrial value chain, underlining manufacturing’s growing role in Nigeria’s non-oil revenue base. In absolute terms, manufacturers paid N309.41 billion more VAT in 9M’25 compared with 9M’24.
The Q3 2025 VAT report by the National Bureau of Statistics (NBS) shows that manufacturing remained the top contributor with a 25.89% share, followed by information and communication at 18.77% and mining and quarrying at 14.85%. The sector also led in Q1’25 (26.03%) and Q2’25 (27.19%).
Analysts attribute the increase partly to rising product prices, production costs, and currency depreciation, which have lifted the taxable value of manufactured goods. Despite macroeconomic challenges—including high energy costs, foreign exchange volatility, and weak consumer spending—manufacturing continues to drive VAT collections.
Economists say the surge highlights the sector’s fiscal importance, particularly as the government leans more on non-oil revenue. However, they caution that higher VAT collections may reflect inflation and currency effects rather than a true rise in industrial output.
The Manufacturers Association of Nigeria (MAN) has expressed concern over the growing VAT burden, warning it could undermine competitiveness, increase operational pressures, and risk job losses. Director General Segun Ajayi-Kadir noted that higher VAT, combined with other taxes, may make Nigerian goods less competitive locally and internationally, while ultimately burdening consumers.
“The high VAT rate directly impacts low- and middle-income earners and could offset gains from national minimum wage increases,” he said, urging the government to carefully weigh further tax adjustments.
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