Federal Government Generates N651.77bn from VAT

Federal Government Generates N651.77bn from VAT

The total Value Added Tax (VAT) revenue increased by N50.79 billion to N651.77 billion in the first half of the year (H1 2020) compared to N600.98 billion in H1 2019, according to the National Bureau of Statistics (NBS).

This represented 8.45 per cent growth year-on-year with the professional services generating the highest amount of VAT with N95.92 billion.

According to the Sectoral Distribution of Value Added Tax (VAT) data for H1 2020 report released yesterday by the statistical agency, the other manufacturing segment generated N67.63 billion followed by commercial and trading which generated N31.10 billion.

Textile and garment industry, as well as pharmaceutical, soaps, and toiletries, generated N499.19 million and N648.78 million respectively while mining recorded the least VAT of N127.58 million.

According to the report, a total of N327.19 billion was generated from VAT in Q2 2020 compared to N324.57 billion (revised) in the preceding quarter.
Quarter on quarter, VAT increased by 0.81 per cent.

Non-import (foreign) VAT rose by 3.92 per cent quarter on quarter to N82.42 billion from N79.31 billion in Q1.

On the other hand, Nigeria Customs Service (NCS) Import VAT rose by 12.44 per cent to N81.66 billion compared to N72.59 billion in Q1.

The marked improvement in VAT performance in both Q1 and Q2 has been attributed to the recent hike in VAT from five per cent to 7.5 per cent which became effective from February 1st.

In Q1, the federal government generated an additional N30.46 billion helped by the rise in VAT. VAT receipts from banks and financial institutions amounted to N10.53 billion by half year and N5.11 billion in Q2 compared to N5.42 billion in Q1.

Also, federal ministries and parastatals for N12.37 billion of VAT revenues as well as N802. 38 million from local government councils in H1.

However, state ministries and parastatals recorded 11.05 per cent increase in VAT from N10.66 billion in Q1 to N11. 84 billion in Q2 with H1 receipts at N22. 50 billion.
VAT from hotels and catering services dropped to N1.36 billion in Q2 compared to N2.52 billion in Q1.

The NBS further that receipts from petrochemical and petroleum refineries declined by 29.97 per cent to N918.86 million from N1.31 billion in Q1.

VAT from the textile and garment industry stood at N193.13 million, representing a decline of 36.89 per cent compared to N306.05 million in the preceding quarter.

By Kolawole Joseph

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