Nigeria’s VAT revenue increases by 15.66% to N338.94bn in Q1

The National Bureau of Statistic (NBS) on Thursday said Value Added Tax (VAT) data for the first quarter (Q1) 2020 reflected that the sum of N338.94billon, which represented an increase of 15.66 per cent.

It, is, however, worthy of note that in a move to boost the non-oil sector, the federal government had increased VAT from five per cent to 7.5 per cent from February 1, 2020.

The bureau in its sectoral distribution report said N308.48billion was generated in fourth quarter (Q4) of 2019 and N293.04billion generated in Q1 2019 representing 9.87per cent increase Quarter-on-Quarter and 15.66per cent increase Year-on-Year.

According to NBS, “Professional Services generated the highest amount of VAT with N38.30billion generated and closely followed by Other Manufacturing generating N37.37billion, Commercial and Trading generating N17.19bn while Mining generated the least and closely followed by the Textile and Garment Industry and Local Government Councils with N61.83million, N306.05million and N319.04million generated respectively.

“Out of the total amount generated in Q1 2020, N172.67billion was generated as Non-Import VAT locally while N93.67billion was generated as Non-Import VAT for foreign. The balance of N72.59billion was generated as NCS-Import VAT.”

While speaking at the inauguration of the Federal Inland Revenue Service (FIRS) board, the Minister of Finance, Zainab Ahmed, confirmed that the law was set to take effect after all necessary administrative procedures had been completed. She added that the fixed date had settled all confusion on the implementation of the law.

“The implementation of the Value Added Tax is to take effect from February 1, 2020, after all the necessary administrative procedures have been completed, especially the gazette of the Act by the Federal Ministry of Justice,” Ahmed said.

Meanwhile, Ahmed stated that the bill took effect immediately it was signed into law but noted that there were certain administrative procedures and formalities to be finalized before commencement.

She added that the Finance Act boosts the revenue available to finance key government projects, especially in the areas of health, education and critical infrastructure.