By Charles Abuede
Nigeria’s total Value Added Tax (VAT) generated so far in 2020 has hit N1.08 trillion within nine months. The figure is a 22.87 per cent increase over the amount (N876.1 billion) recorded for the same period in 2019 on a year to date (YTD) comparison and a 54.4 per cent growth rate year on year when compared with the same period of 2019, according to details from the Nigerian Bureau of Statistic.
According to the data from the Abuja based statistics office accessed by Business A.M., a total VAT of N424.71 billion was generated during the third quarter of 2020, as against N327.20 billion generated in the second quarter of 2020 and N275.12 billion generated in the corresponding quarter (Q3) of 2019, which represents 29.80 per cent increase quarter-on-Quarter and 54.37 per cent increase Year-on-Year.
An analysis of the report on the sectoral distribution of VAT in the period under review reveals that out of the total N424.71 billion generated as VAT in Q3 2020, N214.66 billion was generated as Non-Import VAT locally, while N115.34 billion was generated as Non-Import VAT for foreign. The balance of N94.70 billion was generated as NCS-Import VAT for the period.
Analytical breakdown of the Data
A further breakdown of the data shows that “other manufacturing” generated the highest amount of VAT at N47.07 billion. It was closely followed by Professional Services, which generated N44.01 billion, commercial and trading generated N21.18 billion, while State Ministries and parastatals generated N19.64 billion and Breweries, Bottling and Beverages sector contributed N15.84 billion. These sectors witnessed significant surges from the amount recorded in the second quarter respectively.
On the other hand, mining generated the least with N64.50 million and closely followed by the Textile and Garment Industry with a total of N346.27 million as VAT. Also, Pharmaceutical, Soaps & Toiletries followed the log of least generating sectors with N386.16 million, while publishing, press, paper packaging sector recorded N473.06 million and the Local government councils, generated N567.97 million respectively.
A major upshot from the positive rise in the total VAT rate generated in an economy will inevitably impact on the level of consumption in the economy and the VAT compliance by taxpayers.