Foreign VAT collections rise 83% year-on-year to N830.47 billion in Q1 2026

Nigeria’s foreign Value Added Tax (VAT) collections recorded significant growth in the first quarter of 2026, reflecting the expanding digital economy and improved compliance by non-resident service providers.

An analysis of data released by the National Bureau of Statistics (NBS), compiled by Nairametrics, showed that foreign VAT revenue rose to N830.47 billion in Q1 2026, representing an increase of about 83% from the N454.76 billion recorded in the corresponding period of 2025.

The strong performance highlights the impact of recent tax reforms aimed at broadening Nigeria’s non-oil revenue base and strengthening the taxation of cross-border digital transactions.

What the data is saying

Foreign VAT collections have maintained an upward trend over the past five quarters, according to the NBS data, despite some fluctuations.

• Q1 2025: N454.76 billion
• Q2 2025: N459.95 billion
• Q3 2025: N680.23 billion
• Q4 2025: N503.13 billion

The Q1 2026 collection of N830.47 billion represents the highest quarterly foreign VAT revenue recorded during the period under review, underscoring the growing contribution of imported services and digital transactions to government revenue.

The steady increase suggests stronger tax administration and improved compliance by foreign companies providing services to Nigerian consumers.

Context

The growth in foreign VAT collections comes amid the implementation of the 2025 Nigeria Tax Act, which significantly expands the country’s digital taxation framework and strengthens enforcement across both domestic and cross-border transactions.

• Under the legislation, all non-resident entities supplying taxable goods and services to Nigeria are required to register for tax purposes and charge VAT on eligible transactions.
• The law further stipulates that VAT applies to all taxable supplies made in Nigeria, including goods physically present, imported, assembled, or installed within the country, as well as rights and assets beneficially owned or exercisable in Nigeria.
• The Act also introduces provisions covering non-monetary transactions, requiring VAT to be assessed based on market value in cases involving barter arrangements, gifts, and supplies between connected parties.

In addition, fiscal authorities have strengthened enforcement mechanisms, resulting in most foreign digital payments now attracting VAT deductions in local currency. Similar compliance requirements have also been extended to electronic financial services and digital payment channels, including banking and fintech transactions.

What you should know

Nigeria has intensified efforts to modernise its tax administration as part of broader fiscal reforms aimed at improving revenue mobilisation and expanding the tax base.

• Foreign digital service providers offering services to Nigerian users are now required to comply with local VAT regulations.
• The Nigeria Revenue Service (NRS), in collaboration with the Joint Revenue Board (JRB), recently announced plans to commence implementation of the Taxpayer Identification (Tax ID) system, which will replace the existing TIN Validation API.
• The initiative is expected to improve taxpayer identification, strengthen compliance and enhance tax administration efficiency.

Nairametrics earlier reported that total VAT collections rose to N2.42 trillion in the first quarter of 2026, representing a 17.06% increase from the N2.07 trillion generated in the corresponding period of 2025, with foreign VAT emerging as one of the fastest-growing components of the country’s non-oil revenue base.