The Federal Government has recorded impressive gains in tax revenue collection, with Value Added Tax (VAT) and Company Income Tax (CIT) showing significant increases in the first nine months of 2025. According to fresh figures from the National Bureau of Statistics (NBS), Nigeria’s non-oil revenue streams are finally showing the kind of strength many economists have long advocated for.
VAT Collections Jump to N6.4 Trillion
VAT revenue climbed by an impressive 34 per cent to reach N6.4 trillion between January and September 2025, compared to N4.77 trillion recorded during the same period in 2024. This substantial increase demonstrates improved tax administration and possibly better compliance from businesses across the country.
Breaking down the quarterly performance, VAT collections experienced minor fluctuations but maintained an upward trajectory overall. Revenue dipped slightly by 1.4 per cent to N2.03 trillion in the second quarter from N2.06 trillion in Q1. However, the third quarter saw a strong recovery, with collections rising by 10.66 per cent to N2.28 trillion—representing a 28.1 per cent year-on-year growth.
Where the Money Came From
The Q3 2025 breakdown reveals interesting patterns in VAT sources:
– Local VAT: N1.12 trillion
– Foreign VAT: N680.23 billion
– Import VAT: N479.79 billion
This distribution shows that domestic economic activity remains the primary driver of VAT revenue, accounting for nearly half of total collections.
Sector-by-Sector Performance
Some sectors showed explosive growth while others contracted. Administrative and Support Services led the pack with an 89.28 per cent quarter-on-quarter surge, followed by Arts, Entertainment and Recreation at 82.49 per cent. The Human Health and Social Work sector also posted solid gains of 32.4 per cent.
On the flip side, Real Estate experienced the steepest decline, contracting by 51.33 per cent—a concerning signal for Nigeria’s property market.
When it comes to overall contributions, Manufacturing dominated with 25.89 per cent of total VAT, followed by Information and Communication (18.77 per cent) and Mining and Quarrying (14.85 per cent). These figures highlight the diversification of Nigeria’s tax base beyond traditional oil revenues.
Company Income Tax Soars by 48%
Perhaps even more impressive than VAT growth, Company Income Tax collections jumped by 48 per cent to N7.72 trillion in the nine-month period, up from N5.22 trillion in 2024.
The quarterly trend showed CIT starting at N1.98 trillion in Q1, surging 40 per cent to N2.78 trillion in Q2, and climbing further by 5.7 per cent to N2.96 trillion in Q3—representing a remarkable 67.19 per cent year-on-year increase.
Interestingly, foreign CIT payments of N1.75 trillion exceeded domestic payments of N1.21 trillion in Q3 2025, underscoring the continued importance of multinational companies and foreign investment to Nigeria’s tax revenues.
What This Means for Nigeria
These numbers tell a story of improving tax collection efficiency and economic activity in non-oil sectors. For a country long dependent on oil revenues, these figures represent a positive shift towards fiscal sustainability.
However, challenges remain. The contraction in Real Estate and the heavy reliance on foreign CIT payments suggest vulnerabilities that policymakers must address. Additionally, as tax revenues grow, Nigerians will increasingly demand accountability and visible improvements in public services and infrastructure.
The coming months will reveal whether this momentum can be sustained, especially as the government continues to implement various fiscal reforms aimed at broadening the tax base and improving compliance.
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