Manufacturing Sector Delivers N404bn in Tax Revenue
Manufacturing sector contributed ₦404 billion in taxes despite profitability pressures and rising production costs in Q1 2026.
Nigeria’s manufacturing sector generated more than ₦404 billion in tax revenue during the first quarter of 2026 despite ongoing business challenges.
New data from the National Bureau of Statistics (NBS) show that the manufacturing sector contributed a combined ₦404.07 billion through Value Added Tax (VAT) and Company Income Tax (CIT) in Q1 2026. The sector generated ₦329.59 billion in VAT and ₦74.48 billion in CIT, reinforcing its position as a key driver of Nigeria’s non-oil revenue.
The figures indicate continued strength in manufacturing sector activity despite economic pressures affecting producers across the country. VAT collections from manufacturing rose by 14.86 per cent year-on-year from ₦286.95 billion recorded in the first quarter of 2025. The latest figure also surpassed every quarterly VAT contribution made by the sector throughout 2025.
According to the NBS, the manufacturing sector accounted for 29.75 per cent of the ₦1.11 trillion generated from local VAT payments during the quarter, making it the largest contributor among all sectors of the economy.
VAT performance has remained consistently strong over the past five quarters. Collections increased from ₦286.95 billion in Q1 2025 to ₦297.68 billion in Q2, before easing slightly to ₦290.79 billion in Q3. Revenue rose again to ₦292.12 billion in Q4 before reaching ₦329.59 billion in Q1 2026. In total, the sector contributed ₦1.17 trillion in VAT during 2025, compared with ₦803.53 billion in 2024.
Overall VAT collections reached ₦2.42 trillion in Q1 2026, representing a 9.98 per cent increase from the previous quarter and a 17.06 per cent rise year-on-year. Manufacturing recorded quarter-on-quarter VAT growth of 12.82 per cent, placing it among the leading contributors to the increase.
On the corporate tax side, the sector generated ₦74.48 billion in Company Income Tax, representing 13.82 per cent of domestic CIT collections. However, this marked a notable decline from ₦107.90 billion in Q1 2025 and ₦141.84 billion in Q4 2025, highlighting pressure on company profits due to rising production costs and a difficult operating environment.
The gap between strong VAT growth and weaker CIT performance suggests that while business activity and consumer demand remained resilient, profitability within the manufacturing sector faced increasing strain during the quarter.
Do you think manufacturers can maintain strong output growth if rising operating costs continue to squeeze profitability?
Comments are closed.