After a decline in the first three months of 2019, Value Added Tax (VAT) generated by Nigeria rose 7.92 percent to N311.94 billion, the most in the last 22 quarters, at least.
The National Bureau of Statistics (NBS) in the sectoral distribution of VAT report for the second quarter 2019 published Monday, notes the amount realised in the period represents a 16.95 percent from the same period last year.
The N311.94 billion generated in the second quarter, after some 9 percent jump in VAT two quarters ago, is the biggest quarterly gain since the second quarter of 2017.
VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain – from production to the point of sale. It is an indirect tax.
In Nigeria, revenue from VAT is distributed among the three tiers of government with 15 percent allocation to the Federal Government, 50 percent to state governments and 35 percent to local governments.
According to the report, while the non-import VAT locally totalled N151.56 billion, 10.58 percent more than N137 billion in the previous quarter, non- import VAT for foreign and Ncs-import VAT rose to N94.9 billion and N65.48 billion, respectively.
A breakdown of the nonimport VAT shows the manufacturing sector generated the highest amount of VAT with N34.43 billion, representing a quarterly increase of 9.57 percent and a year-on-year increase of 6.07 percent.
As second top contributor, Professional Services generated N29.58 billion while Commercial and Trading, and Breweries, Bottling and Beverages generated N16.27 billion and N11.27 billion, respectively.
State Ministries and Parastatals generated N10.45 billion while the Federal counterpart generated N8.11 billion to round off the top 6 sectors by VAT generation.
Leading the laggards, Mining generated N50.6 million, a 15.51 percent decline from a year ago but an improvement from the last quarter.
Nigeria, faced with revenue challenges amid uncertainty in the global oil market, is mulling new ways to boost its earnings.
The country’s federal tax agency is seeking to tap opportunities in the country’s booming online businesses to raise fund for government.
Babatunde Fowler, executive chairman, Federal Inland Revenue Service (FIRS), disclosed Monday that the agency would commence its VAT on online transactions, both domestic and international, effective from January 2020.
The FIRS boss, who was at the African Tax Administration Forum (ATAF) Technical Workshop on VAT in Abuja, said the date remained tentative until approval from the government.
