Nigeria generates N652bn from VAT in H1’20

Nigeria generates N652bn from VAT in H1’20

Despite the out break of the novel Coronavirus, (COVID-19) in Nigeria, currently raving across the world, the Federal Inland Revenue Service, FIRS, generated N652 billion from Value Added Tax, VAT, in the first half of 2020, H1 ’20.

The figure generated represents an increase of 8.45 percent as against the N600.9 billion realised in the first six months of 2019 (H1’19).

The National Bureau of Statistics (NBS) stated this in its Sectoral Distribution Of Value Added Tax (H1 2020),

The statistic agency stated that the total revenue was generated from 28 sectors of the economy.

According to NBS , “Sectoral distribution of value-added tax (VAT) data for H1’2020 reflected that the sum of N651.77 billion was generated as VAT in H1’2020 as against N600.98 billion generated in the first half of 2019 (H1’2019). This represents 8.45 percent growth year-on-year (YoY).

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The report further stated that Professional Services generated the highest amount of VAT at N95.92 billion, closely followed by Other Manufacturing generating N67.63 billion, Commercial and Trading generating N31.10billion, Breweries, Bottling and Beverages N24.76 billion, and States, Ministries and Parastatals generating N22.50 billion, while Mining generated the least N127.57 million.

NBS further stated that, other sectors that were ranked in the rear end were Textile and Garment industry N499.18 million; Pharmaceutical, Soaps and Toiletries (N648.77 million; Local Government councils N802.38 million; and Publishing, Printing, Paper Packaging N884.34 million.

The report noted that out of the total amounted generated in H1 2020, N335.82 billion was generated as Non-Import VAT locally while N161.74 billion was generated as Non-Import VAT for foreign, adding that the balance of N154.21 billion was generated as Nigeria Custom Service-import VAT.

Nigeria began implementation of the 7.5 percent VAT, which was part of the tax amendments made in the 2019 finance act, in February 2020.

On quarterly basis, NBS stated that a total sum of N327.1 billion revenue was generated from VAT in the second quarter of 2020 (Q2 2020), up by 0.81percent when compared to N324.58 billion in Q1 2020.

The report however indicated that despite VAT remittance growing by 0.81% in the second quarter, critical sectors in the economy such as manufacturing, hotel catering, trading, transport, oil, and construction recorded significant declines in VAT remittances during the period. Overall, twenty-one (21) of the twenty-eight (28) sectors recorded declines in VAT remittances in Q2 2020, a significant decline which may be largely attributed to the COVID-19 induced lockdown across the country during the period.

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