Manufacturing emerged as the highest contributor to Nigeria’s non-oil tax revenue in the first quarter of 2026, generating ₦404 billion through Value Added Tax (VAT) and Company Income Tax (CIT).

This was revealed in the latest fiscal performance data covering key sectors of the economy, showing how industrial activity continues to play a central role in strengthening government revenue beyond crude oil earnings.

The sector’s contribution highlights the growing importance of domestic production and industrial output in Nigeria’s revenue structure. Despite ongoing economic pressures, manufacturing firms accounted for a significant share of tax inflows driven by increased production activities and formal sector compliance.

The data indicates that VAT collections remain a major driver of non-oil revenue, reflecting consumption patterns tied to manufactured goods and services. CIT payments from manufacturing companies also contributed substantially, reinforcing the sector’s position as a key pillar of corporate taxation.

Other sectors also contributed to non-oil revenue generation, but manufacturing maintained the lead, underscoring its expanding footprint in the country’s fiscal landscape. Analysts note that this trend reflects gradual improvements in industrial activity and tax compliance within the formal economy.

The performance comes at a time when Nigeria continues to push for diversification away from oil dependency. Policymakers have repeatedly emphasized the need to strengthen non-oil sectors such as manufacturing, agriculture, and services to stabilize public revenue.

However, challenges such as high production costs, foreign exchange pressures, and infrastructure deficits continue to affect manufacturing output. Industry operators have consistently called for reforms aimed at improving power supply, logistics, and access to affordable financing.

Despite these constraints, the sector’s strong tax contribution in the first quarter of 2026 signals resilience and its critical role in supporting government revenue objectives.

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Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, says pastors and imams must pay tax on their earnings once they exceed the approved non-taxable threshold.

He explained that the new rule aligns with Nigeria’s commitment to fairness and equal treatment in its tax system.

Speaking during a public session, Oyedele stressed that no religion is exempt from taxation when income crosses the legally defined limit. He added that tax laws apply to every worker, whether they operate in the church, mosque, private sector, or public service.

He said the government cannot create a system where one religious group receives preferential treatment over another. According to him, fairness demands that all income-earning adults, including religious leaders, contribute to the country’s tax base.

Why the Clarification Matters

The explanation is part of broader reforms aimed at simplifying Nigeria’s tax structure. The policy seeks to reduce confusion, close loopholes, and make tax compliance easier for individuals and organisations.

Oyedele has intensified public awareness as Nigeria prepares to implement the new tax regime in January 2026. The reforms focus on widening the tax net, improving compliance, and ensuring that all earners contribute appropriately.

Taxation of Remote Workers

During a webinar hosted by the National Orientation Agency, Oyedele also addressed the taxation of Nigerians working remotely for foreign companies. He said every remote worker must declare their income, regardless of where the employer is located.

Nigeria, he noted, has signed information-sharing agreements with over 100 countries to enforce digital economy taxation.

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