Manufacturing sector tops non-petroleum tax earnings with N404 billion in value-added tax and company income tax payments for the first quarter of 2026.

Nigeria's manufacturing sector played a vital role in bolstering government revenue in the first quarter of 2026, yielding N329.59 billion in Value Added Tax and N74.48 billion in Company Income Tax, for a total of N404.07 billion.

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According to data from the National Bureau of Statistics, the sector's significance to Nigeria's non-oil revenue base persisted, despite the economic and operational challenges manufacturers faced, with NBS data highlighting the sector's enduring importance.

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VAT collections from manufacturing activities saw a 14.86 per cent year-on-year increase to N329.59 billion in Q1'26, up from N286.95 billion in the corresponding period of 2025, demonstrating the sector's resilience in output and consumption.

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This amount surpassed the sector's quarterly VAT contributions throughout 2025, underscoring the strength of manufacturing output and consumption, and accounting for 29.75 per cent of the N1.11 trillion generated from local VAT payments during the quarter.

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Manufacturing was the largest contributor among all sectors of the economy, with the sector's VAT performance remaining strong over the past five quarters, generating N286.95 billion in VAT in Q1'25, N297.68 billion in Q2'25, N290.79 billion in Q3'25, and N292.12 billion in Q4'25.

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The sector's VAT revenue climbed sharply to N329.59 billion in Q1'26, and overall, manufacturing contributed N1.17 trillion in VAT revenue in 2025, compared with N803.53 billion in 2024, highlighting the sector's growing significance in domestic revenue mobilisation.

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Total VAT collections in Q1'26 stood at N2.42 trillion, representing a 9.98 per cent increase from N2.20 trillion recorded in Q4'25 and a 17.06 per cent rise year-on-year, with manufacturing posting a quarter-on-quarter VAT growth rate of 12.82 per cent.

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Manufacturing was among the leading sectors driving the increase, and on the corporate tax front, the sector generated N74.48 billion in CIT during the quarter, accounting for 13.82 per cent of domestic CIT collections of N538.91 billion.

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The sector ranked third among the largest contributors to CIT revenue, behind financial and insurance activities and mining and quarrying, but CIT contributions from manufacturers declined significantly compared with N107.90 billion recorded in Q1'25 and N141.84 billion in Q4'25.

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This decline reflected pressure on corporate profitability amid rising production costs and a challenging business environment, with overall CIT collections standing at N1.37 trillion in Q1'26, down 8.08 per cent from N1.49 trillion in the preceding quarter and 31.05 per cent lower than the level recorded in Q1'25.

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The contrasting performance of VAT and CIT suggested that while manufacturing activity and consumer demand remained relatively strong during the quarter, profitability within the sector came under pressure.