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Nigeria’s VAT rises to N781.35bn in second quarter – NBS

THE National Bureau of Statistics (NBS) has reported an increase in value-added tax (VAT) from N709.59 billion in the first quarter (Q1) to N781.35 billion in the second quarter (Q2).

The NBS disclosed this in its ‘Sectorial Distribution of Value Added Tax (Q2 2023)’ report released on Saturday, September 2, highlighting that the VAT grew by 10.11 on a quarter-on-quarter basis.

VAT is a consumption tax the final consumer bears, and it is paid when goods are purchased and services rendered.

It is one of the primary government funding sources as the federal government targets N10.49 trillion in revenue in its 2023 budget.

It is charged at a rate of 7.5 per cent, according to the Federal Inland Revenue Service (FIRS).

The latest NBS report shows VAT from local payments stood at N512.03 billion, foreign, N142.63 billion, while import VAT contributed N126.69 billion.

On the activity line, extraterritorial organisations and bodies recorded the highest growth rate with 212.06 per cent to N277.82 million, followed by real estate with 123.09 per cent to N1.15 billion.

On the contrary, households as employers, undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate, falling by 57.06 per cent to N73.72 million even as agriculture, forestry, and fishing also declined in the review quarter.

Regarding sectoral contributions, manufacturing, information and communication, and financial and insurance activities were the top three contributors.




     

     

    The manufacturing contribution rose by 29.64 per cent to N151.78 billion, information and communication by 21.19 per cent to N108.48 billion, and financial and insurance activities by 11.18 per cent to N57.27 billion.

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    However, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded a minor share, followed by water supply, sewerage, waste management, and remediation activities, and activities of extraterritorial organisations and bodies.

    But on a year-on-year basis, VAT collections increased by 30.19 per cent from N600.15 billion in the corresponding quarter of last year.

    To address revenue underperformance and expenditure efficiency, President Bola Tinubu set up a tax committee, chaired by Taiwo Oyedele, to look into the tax system.

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