The National Bureau of Statistics (NBS) has disclosed that Nigeria generated a total of N2.03tn from Value Added Tax (VAT) collections in 2021, the highest revenue reportedly recorded so far.
According to the report, Nigeria earned N563.72bn from VAT in Q4, a growth of 12.63 per cent, quarter-on-quarter.
On a year-on-year basis, VAT collections in Q4 2021 increased by 23.98 per cent from Q4 2020.
For sectoral distribution of local revenue generated over the period, collections from the other manufacturing activity, professional services activity and state ministries and parastatals accounted for the top three largest shares of revenue in Q1 2021 with N49.41bn (21.97 per cent), N42.5bn (18.9 per cent), and N26.96bn (11.99 per cent) respectively.
The public administration, defence, and compulsory social security sectors remitted a sum of N55.82 billion as value-added tax in H2 2021. This accounts for 8.9% of the total local non-import tax while the financial and insurance sector accounted for 8.1%.
Furthermore, non-import VAT (local) was N224.85bn, non-import (foreign) VAT amounted to N171.66bn, while NCS-Import VAT stood at N99.88bn.
Other manufacturing activity, professional services activity as well as commercial and trading activity accounted for the top largest collections in Q2 2021 with N44.89bn (23.95 per cent), N29.30bn (15.63 per cent) and N21.96bn (11.71 per cent) respectively.
Non-import VAT local was N187.43bn in Q2, lower than what was recorded in Q1.
While non- import (foreign) VAT stood at N207.69bn, NCS-Import VAT rose to N117.13bn, an improvement from the preceding quarter.
“In terms of sectoral contributions, the top three largest shares in Q4 2021 were manufacturing with 30.86 per cent; information and communication with 18.72 per cent and mining and quarrying with 9.91 per cent”, the NBS said.
According to the Federal Inland Revenue Service (FIRS) VAT is a consumption tax paid when goods are purchased and services rendered. It is a multi-stage tax and is borne by the final consumer.
Investors King gathered that all goods and services (produced within or imported into the country) are taxable except those specifically exempted by the VAT Act. The VAT is charged at a rate of 7.5%.
However, some goods and services such as non-oil exports are zero rated.
Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator and a recipient of the D9112 Superstar Icon Award, who writes ruthlessly about pop culture, religion, politics and entertainment.
