Nigeria’s manufacturing sector contributed N875.420 billion to Value Added Tax in the first nine months of 2025.

This figure surpassed the N566.011 billion recorded in the corresponding period of 2024 and the N578.394 billion generated throughout the entire 2023 fiscal year.

VAT remittances from manufacturers increased by 54.7 per cent year-on-year between January and September 2025.

The growth reflects higher tax collections across the industrial value chain and the sector’s rising role in Nigeria’s non-oil tax revenue.

In absolute terms, manufacturers remitted N309.409 billion more VAT in the first nine months of 2025 than in the same period of 2024.

The N875.420 billion collected in just nine months of 2025 exceeded the full 2023 contribution by about 51.3 per cent.

This highlights a rapid rise in tax payments from the sector.

According to the Q3 2025 VAT report released by the National Bureau of Statistics (NBS), the top three activities by share in Q3 2025 were Manufacturing at 25.89 per cent, Information and communication at 18.77 per cent, and Mining and quarrying at 14.85 per cent.

Manufacturing led VAT contributions in earlier quarters as well, with 26.03 per cent in Q1 2025 and 27.19 per cent in Q2 2025.

Industry analysts link the increase partly to higher product prices, elevated production costs, and currency depreciation, which have boosted the taxable value of manufactured goods along the supply chain.

The sector has sustained its position as a major VAT contributor despite challenges such as high energy costs, foreign exchange volatility, and reduced consumer purchasing power.

Economists note that the surge in VAT payments demonstrates the manufacturing sector’s growing fiscal importance as the Federal Government leans more on non-oil taxes to fund public finances.

However, analysts warn that the higher VAT remittances may not indicate proportional growth in industrial output.

They point out that inflation-driven price increases and exchange-rate impacts have likely inflated nominal tax collections significantly.

The Manufacturers Association of Nigeria (MAN) has voiced deep concerns about the heavy VAT burden on the manufacturing sector, while recognizing its value for government revenue.

Director General of MAN, Segun Ajayi-Kadir, warned that the current tax levels, coupled with rising operational costs, are putting intense pressure on companies, hindering competitiveness, and risking job losses.

“The high VAT rate, along with other taxes and levies, makes Nigerian products less competitive both locally and internationally, especially when compared to foreign goods,” he said.

MAN has consistently cautioned the Federal Government against raising VAT, arguing it would lead to a demand crunch, increase unsold inventory, and potentially reduce the profitability of manufacturing concerns.

“The burden of increased VAT is directly shifted to consumers, which hurts low- and middle-income earners and could negate the positive impact of national minimum wage increases,” Ajayi-Kadir added.