By Olalekan Adigun
Nigeria’s Value Added Tax (VAT) revenue declined to ₦2.19 trillion in the fourth quarter of 2025, reflecting a slight slowdown in consumption and taxable transactions despite continued economic resilience.
According to data released by the National Bureau of Statistics, the Q4 figure represents a 3.78% decrease from the ₦2.28 trillion recorded in the third quarter of the same year.
Despite the quarter-on-quarter dip, VAT collections still showed strong year-on-year performance, rising by 12.84% compared to Q4 2024. This suggests that Nigeria’s tax base is gradually expanding, supported by improved compliance and broader economic activity.
A breakdown of the figures reveals that domestic transactions remained the largest contributor, generating ₦1.16 trillion. Foreign VAT accounted for ₦503.13 billion, while import-related VAT contributed ₦535.73 billion, highlighting the diverse sources of government revenue.
Sectoral performance during the period was mixed. Activities such as water supply, waste management, and remediation services recorded the highest growth, while real estate and household-related services also posted significant increases. However, sectors like administrative services, agriculture, and extraterritorial organisations experienced declines, reflecting uneven economic momentum.
In terms of overall contribution, manufacturing remained the dominant sector, accounting for over a quarter of total VAT revenue, followed by information and communication as well as mining and quarrying.
The decline in Q4 VAT collections comes amid broader fiscal adjustments and ongoing tax reforms aimed at strengthening Nigeria’s revenue framework. While the short-term drop may indicate fluctuations in consumer spending, the sustained annual growth underscores a more resilient and expanding tax system.
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