Foreign VAT revenue jumps 83% to N830bn in Q1

By Abubakar Yunusa

Nigeria’s foreign Value Added Tax collections rose sharply in the first quarter of 2026, with revenue increasing by 83 per cent year-on-year to N830.47bn, signalling stronger compliance by foreign service providers and the growing influence of the country’s digital economy.
Data released by the National Bureau of Statistics and analysed by Nairametrics showed that foreign VAT revenue climbed from N454.76bn recorded in the corresponding period of 2025 to N830.47bn in Q1 2026.
The latest figure represents the highest quarterly foreign VAT collection recorded within the past five quarters under review.
The development underscores the increasing contribution of imported services and cross-border digital transactions to Nigeria’s non-oil revenue earnings.
A breakdown of the figures showed that foreign VAT collections stood at N454.76bn in the first quarter of 2025 before rising slightly to N459.95bn in the second quarter.
Collections increased significantly to N680.23bn in the third quarter of 2025 before declining to N503.13bn in the fourth quarter. However, revenue rebounded strongly in the first quarter of 2026, reaching N830.47bn.
Analysts attributed the growth to ongoing tax reforms designed to expand the Federal Government’s revenue base and improve taxation of digital transactions involving foreign firms.
The increase also coincides with the implementation of the Nigeria Tax Act 2025, which broadened the country’s digital taxation framework and strengthened enforcement measures for domestic and cross-border transactions.
Under the law, non-resident entities supplying taxable goods and services to Nigerian consumers are required to register for tax purposes and charge VAT on eligible transactions.
The legislation further provides that VAT applies to taxable supplies made within Nigeria, including imported goods, assembled products, installed assets, and rights beneficially owned or exercised in the country.
The Act also introduced provisions covering non-monetary transactions, making it mandatory for VAT assessments to be based on market value in cases involving gifts, barter arrangements and transactions between related parties.
Industry observers noted that tax authorities have intensified enforcement efforts, leading to wider compliance among foreign digital service providers operating in Nigeria.
The strengthened enforcement regime has also ensured that most foreign digital payments now attract VAT deductions in naira, while similar compliance obligations have been extended to electronic financial services, banking platforms and fintech transactions.
The sustained rise in foreign VAT collections is expected to boost government revenues and further support efforts to reduce dependence on oil earnings amid ongoing fiscal reforms.