LAGOS, June 15 – Nigeria’s foreign Value Added Tax (VAT) collections rose sharply in the first quarter of 2026, reflecting the growing size of the country’s digital economy and improved compliance by foreign companies providing services to Nigerian consumers.
According to Data released by the National Bureau of Statistics showed that foreign VAT revenue reached N830.47 billion ($610.39 million) during the quarter, representing an 83% increase from the N454.76 billion (approximately $331.97 million) recorded in the same period of 2025.
The performance marks the highest quarterly foreign VAT collection recorded in recent years and underscores the increasing importance of digital transactions and imported services as sources of non-oil government revenue.
Foreign VAT collections have maintained a consistent upward trajectory over the past five quarters, supported by regulatory reforms and stronger tax enforcement measures.
The growth comes amid the implementation of Nigeria’s 2025 Tax Act, which significantly expanded the country’s digital taxation framework and strengthened rules governing cross-border transactions.
Under the legislation, non-resident companies supplying taxable goods and services to Nigerian customers are required to register for tax purposes and charge VAT on eligible transactions.
The law also broadened the scope of taxable activities, covering imported goods and services, digital transactions, rights and assets exercised within Nigeria, as well as certain non-monetary transactions such as barter arrangements and supplies between related parties.
Fiscal authorities have simultaneously strengthened enforcement mechanisms across digital payment channels, helping to improve compliance among foreign service providers operating in the Nigerian market.
As a result, many cross-border digital payments now attract VAT deductions, while compliance requirements have been extended to electronic financial services, banking platforms and fintech operators.
The increase in foreign VAT revenue forms part of Nigeria’s broader strategy to diversify government income away from oil dependence and improve domestic revenue mobilisation.
Authorities have intensified efforts to modernise tax administration through the use of technology and enhanced taxpayer identification systems.
In a further move to strengthen compliance, the Nigeria Revenue Service and the Joint Revenue Board recently announced plans to implement a new Taxpayer Identification (Tax ID) framework that will replace the existing TIN Validation API.
Officials expect the initiative to improve taxpayer verification, strengthen compliance monitoring and enhance the efficiency of tax administration across the country.
The rise in foreign VAT collections also contributed to stronger overall VAT performance.
Total VAT revenue generated in Nigeria increased to N2.42 trillion in the first quarter of 2026, up 17.06% from N2.07 trillion recorded during the same period last year.
The figures highlight the growing role of digital taxation and cross-border commerce in supporting Nigeria’s fiscal position as the government seeks to expand its non-oil revenue base and strengthen public finances.
