Nigerian manufacturers contributed N1.17 trillion in value-added tax (VAT) in 2025 despite a tough operating environment, persistent business challenges, rising energy costs, and infrastructure constraints, according to Leye Kupoluyi, president of the Lagos Chamber of Commerce and Industry (LCCI).
VAT and CIT Contributions Rise
Speaking on the state of the economy, Kupoluyi urged the government to urgently resolve the numerous constraints in the manufacturing sector. He noted that despite the near-collapse of the sector, manufacturers still contributed significantly through VAT, and the sector could do much more if it were thriving.
The sector's VAT contribution represented a 45.61 percent increase from the N803.53 billion recorded in 2024. Meanwhile, Company Income Tax (CIT) contributions rose to N881.29 billion from N663.46 billion in the previous year, reflecting a 32.83 percent increase.
Operational Challenges Persist
Despite this strong revenue performance, Kupoluyi regretted that manufacturers continue to face significant operational challenges, especially unstable electricity supply, rising logistics and alternative energy costs, foreign exchange pressures, and skyrocketing production costs.
He decried that many businesses now spend even more on diesel and other alternative power sources due to worsening electricity supply, despite assurances given when they were forced onto Band A tariffs a few years ago.
He warned that the poor state of power supply remains one of the biggest impediments to business operations and industrial productivity, noting that businesses cannot be expected to survive if the situation persists.
Capital Budget Releases and Import Duties
Kupoluyi also raised concerns over delays in capital budget releases and unpaid contractor obligations. He expressed concern over high import duties on paper, printing materials, and related consumables, noting that the current policy increases production costs for businesses in the printing, publishing, packaging, education, advertising, and manufacturing value chains.
“This situation, combined with port delays, multiple regulatory checks, inconsistent tariff classifications, and administrative bottlenecks, significantly increases production costs and affects the prices of essential printed materials,” he said.
“We strongly advocate for a review of import duties, full integration of regulatory agencies into the National Single Window (NSW), standardisation of tariff classifications, and deliberate efforts to reduce cargo clearance timelines without introducing additional costs.”
Call for Policy Reforms
Kupoluyi added that a practical policy mix of moderate tariffs, support for local manufacturing, and stable macroeconomic conditions will strengthen the printing and packaging industries, lower business costs, and contribute to broader economic growth.
Touching again on the NSW, he stressed that the system should not follow the path of its predecessors. It must deliver real-time interoperability among all trade-related government agencies, eliminate duplication, reduce delays, lower transaction costs, and significantly improve transparency across the import and export process.
He stressed the need for stronger investment in productive infrastructure, improved power supply, fiscal reforms, and economic policies that support industrial growth, job creation, productivity, lower production costs, and business sustainability across the country.
