Foreign Currency Tax Revenues Jump By 27% To N6.33trn

Nigeria’s foreign currency-denominated tax receipts rose significantly to N6.33 trillion in 2025, driven by stronger contributions from multinational companies and the impact of exchange rate adjustments, according to newly released data from the National Bureau of Statistics.

The figure marks a 27.3 per cent increase from the N4.97 trillion recorded in 2024, underscoring a growing dependence on foreign-currency-linked tax inflows amid ongoing currency volatility and expanding activities of export-oriented and foreign firms.

Analysis of the National Bureau of Statistics (NBS) Value Added Tax (VAT) and Company Income Tax (CIT) reports shows that foreign currency payments accounted for a substantial portion of total tax collections across the two major revenue streams.

Total VAT collections increased from N6.72 trillion in 2024 to N8.61tn in 2025, while CIT rose from N7.66 trillion to N9.22 trillion within the same period. Combined, VAT and CIT collections stood at approximately N17.83 trillion in 2025.

Out of this total, foreign-currency-denominated tax payments of N6.33 trillion accounted for about 35.5 per cent, indicating that more than one-third of government earnings from these sources were tied to foreign-currency transactions.

A breakdown of VAT collections reveals that “other payment channels, including the naira equivalent of VAT paid in foreign currency,” increased from N1.83 trillion in 2024 to N2.10 trillion in 2025. This segment largely reflects VAT generated from foreign-currency transactions in sectors such as telecommunications, oil and gas, financial services, and cross-border digital platforms.

Similarly, foreign currency company income tax rose from N3.14 trillion in 2024 to N4.23 trillion in 2025. These payments are primarily linked to multinational corporations, oil producers, exporters, and firms that earn revenue in foreign currencies.

Quarterly CIT data show notable fluctuations.

Foreign-currency CIT stood at N1.34 trillion in the first quarter of 2025, declined sharply to N469.36 billion in the second quarter, rebounded to N1.75 trillion in the third quarter, and moderated to N668.21 billion in the fourth quarter.

Overall, total foreign-currency tax receipts increased from N1.03 trillion in the first quarter of 2024 to N1.79 trillion in the first quarter of 2025, reflecting a strong start to the year. However, collections dipped to N929.30bn in the second quarter, surged to N2.43tn in the third quarter, and eased to N1.17tn in the final quarter.

The upward trend in foreign-currency tax revenues aligns with Nigeria’s exchange rate reforms and transition toward a more market-reflective currency regime. These changes have raised the naira value of foreign-denominated transactions, thereby boosting tax receipts when converted into local currency.

Despite the growing dominance of foreign-linked revenues, domestic tax performance also recorded steady gains. Local VAT collections, excluding imports, rose from N3.30tn in 2024 to N4.48tn in 2025, reflecting sustained growth in consumer spending.

Import VAT collected by the Nigeria Customs Service increased from N1.59tn to N2.03tn over the same period, pointing to higher import activity and improved collection efficiency.

On the CIT side, local company income tax payments grew from N3.40tn in 2024 to N4.99tn in 2025, suggesting stronger corporate earnings and improved compliance among domestic firms.

However, the faster expansion of foreign-currency tax components relative to domestic sources highlights an emerging structural shift in Nigeria’s tax base toward sectors with significant foreign-exchange exposure, raising important considerations for fiscal sustainability and revenue stability.