Nigeria's Value Added Tax (VAT) revenue has recorded its seventh consecutive quarterly increase, reaching a new high of N2.06 trillion in the second quarter of 2025. This sustained growth trend began after the federal government initiated major economic reforms, including the removal of the fuel subsidy and the unification of exchange rates in the third quarter of 2023.
Sectoral Breakdown and Key Contributors
The latest data from the National Bureau of Statistics (NBS) reveals a significant 32.15 per cent year-on-year jump from the N1.56 trillion collected in the second quarter of 2024. A detailed analysis of the contributions shows that local payments formed the bulk of the revenue at N1.09 trillion. Import VAT followed with N508.55 billion, while foreign VAT payments contributed N459.95 billion.
When examining economic activities, the manufacturing sector led the pack with the largest share of 27.19 per cent, showing a slight increase from the previous quarter. The information and communication sector was a strong second with 20.76 per cent, a notable rise from the 17.51 per cent it recorded in Q1 2025. Mining and quarrying completed the top three with a 15.04 per cent share, despite a small drop from the first quarter.
High Growth and Declining Sectors
The quarter witnessed dramatic growth in specific industries. Real estate activities exploded with an astonishing 155.21 per cent growth rate on a quarter-on-quarter basis. Agriculture, forestry, and fishing also showed robust performance with a 23.64 per cent increase, while information and communication grew by 17.75 per cent.
Conversely, some sectors experienced sharp declines. Human health and social work activities suffered the most significant drop at -68.34 per cent. The electricity, gas, steam, and air conditioning supply sector also contracted by -45.20 per cent, and water supply, sewerage, waste management, and remediation activities declined by -29.36 per cent.
Consistent Growth Trajectory Since 2023
The NBS report outlines a clear and steady upward trend in VAT collections since the economic reforms took effect. The journey began in Q3 2023 with collections of N948.07 billion. This figure rose to N1.20 trillion in Q4 2023 and continued climbing to N1.43 trillion in Q1 2024. The growth persisted through 2024, with Q2 at N1.56 trillion, Q3 at N1.78 trillion, and Q4 reaching N1.95 trillion, setting the stage for the latest record in Q2 2025.
At the other end of the spectrum, activities of households as employers had the smallest sectoral share at just 0.005 per cent, followed by activities of extraterritorial organizations and bodies at 0.02 per cent.
