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The amount of value-added tax remitted by electricity and gas consumers in Nigeria collapsed by more than half in the first quarter of 2026, as a sweeping rewrite of the country’s tax code stripped a major chunk of the power sector out of the standard VAT net.
Receipts from electricity, gas, steam and air conditioning supply fell to N7.56 billion between January and March, down 51 percent from N15.63 billion collected in the same period a year earlier, according to sectoral VAT data published by the National Bureau of Statistics. The figure also came in seven percent below the fourth quarter of 2025, making the energy sector one of the weakest non-oil tax contributors in the economy during the period.
The plunge is steep enough to invite alarm, but industry experts say the headline number obscures what is, at its core, a policy decision rather than a sector in distress.
“The 51 percent year-on-year contraction in electricity VAT in the first quarter of 2026 looks alarming on its face, but the largest single cause is a deliberate change in the law rather than a collapse in the power sector,” said Ayodele Oni, energy lawyer and partner at Bloomfield Law Practice.
