Nigeria generated a total sum of N289.04 billion Value Added Tax (VAT) in the first quarter of 2019, this amount represents a 3% decline when compared to the N298.01bn generated in the fourth quarter (Q4) 2018. This was revealed in the latest Sectoral Distribution VAT report released by the Nationa Bureau of Statistics (NBS) for Q1 2019.
According to the Bureau’s report, on a year-on-year basis, VAT increased by 7.13% in Q1 2019, up from N269.79 billion generated in Q1 2018.
Also, the report shows that out of the total VAT generated in Q1 2019, N137.06bn was generated as Non-Import VAT locally while N98.97bn was generated as Non-Import VAT for foreign. The balance of N5.01bn was generated as NCS-Import VAT
High Performing Sectors – For the first quarter of 2019, other manufacturing sector generated the highest amount of VAT with N31.42bn and closely followed by Professional Services with N24.31bn, Commercial and Trading generating N14.92bn. Also, Breweries, Bottling and Beverages VAT rank 4th, with N10.8 billion, while Oil Producing ranks 5th highest VAT generating revenue source with N8.49 billion.
Meanwhile, among the top five highest contributors to VAT in Q1, Breweries, Bottling and Beverages sector recorded the highest growth of 10.74% within the last quarter. Also, Other manufacturing VAT grew by 9.04% while Professional Services VAT grew by 0.82%. However, Commercial and Trading and Oil producing sectors all recorded a negative growth of 6.84% and 43% respectively.
Low Performing Sectors – During the quarter, the top five low performing sectors include Automobiles and Assemblies Publishing, Printing and Paper Packaging, Textile and Garment industry, Pharmaceutical, Soaps and Toiletries and Minning.
Mining generated the least of N59.8 million VAT, and closely followed by Pharmaceutical Soaps & Toiletries (201.5 million). Others are the Textile and Garment industry with N298.13 million, Publishing, Printing and Paper Packaging (N201.58 million) and Automobiles and Assemblies (N298.14 million) respectively.
Upshots – The reduction in VAT revenue in the first quarter of 2019 may be largely due to the general elections. However, this claim may not be totally true due to the fact that tracking back to the corresponding period in Q1 2015, VAT generated increase by 53% between Q4 2014 and Q1 2015. This suggests that the general election may not be the sole reason for the downturn in VAT for the period under review.
However, improvement in VAT is expected as the Federal Inland Revenue Service (FIRS) has perfected plans to begin VAT collection on online transactions any moment from now. Also, the agency recently disclosed that it expected to generate between between N750 billion and N1 trillion by clamping down on businesses that failed to embrace the Federal Government’s tax amnesty programme.