The latest report released by the National Bureau of Statistics (NBS) shows that Nigeria generated N311.94 billion revenue from Value-Added Tax (VAT) in the second quarter (Q2) of 2019.
According to the report, the VAT generated in the second quarter represents a 7.92% increase in VAT revenue when compared with what was generated in Q1 2019. Also, the sum of N266.7 billion was generated in Q2 2018, as against the N311.94 billion generated in Q2 2019.
VAT breakdown: The report further shows that year-on-year, VAT generated rose by 16.95% in Q2 2019. The VAT generated was put at N269.79 billion in Q1, while it rose to N311.94 billion in Q2 2019.
- Out of the total amount generated in Q2 2019, N151.56 billion was generated as Non-Import VAT locally while N94.90 billion was generated as Non-Import VAT for foreign. The balance of N65.48 billion was generated as NCS-Import VAT.
- A closer look into the report reveals VAT revenue by sector. Other manufacturing, professional services and commercial trading top the chart for the highest contribution of VAT generated.
- Specifically, other manufacturing sectors generated the highest amount of VAT with N34.43 billion and closely followed by Professional Services with N29.58 billion VAT, while commercial and trading ranks 4th to generate N16.27 billion. According to the NBS report, other manufacturing has been the biggest contributor to Nigeria’s VAT in several quarters.
- On the other hand, mining generated the least and closely followed by Pharmaceutical, Soaps & Toiletries and Textile and Garment Industry with N50.60 million, N250.09 million and N316.91 million generated.
Biggest Growth: According to the latest statistics on VAT generated across sectors in Nigeria, this is the biggest quarterly VAT revenue generated in over 7 years.
On the other hand, in terms of growth recorded between Q1 and Q2 2019, transportation and haulage services recorded the biggest growth in VAT revenue. Transportation and haulage services posted 205.35% VAT revenue growth.
Similarly, hotels and catering ranks second in terms of growth in VAT revenue. The sector recorded a 31.38% growth in VAT revenue. State Ministries and Parastatals, Petrol-Chemical and Petroleum Refineries rank top to record with the biggest growth in VAT revenue.
On the other hand, sectors that recorded a major decline in VAT remittances include Mining, Gas, Conglomerate, Pioneering and Stevedoring, Clearing and Forwarding.
More VAT? As published by Nairametrics on Monday, effective from January 2020, the FIRS has announced that it would begin to impose VAT on online transactions, both domestic and international.
Speaking on the new development, the FIRS boss noted that a lot of countries had identified Nigeria as a good market and many of them were into online businesses. He added that there was a need to tap the potentials to generate more revenue for the country.
Upshots: While the Federal Inland Revenue Service (FIRS) recorded the biggest quarterly growth in VAT revenue, it remains unknown if the total tax collection in 2019 would meet the 2019 target. A look at the FIRS website shows that in Q2 2018, tax revenue collection was 77% of the total target.
Recall that the Federal Government recently queried the Chairman of FIRS, Babatunde Fowler, over the shortfalls in tax revenues. The FG questioned the FIRS on why tax revenue shortfall became widened and worse off in previous years (2017 and 2018).
Meanwhile, the FIRS Boss has responded, explaining that the dip recorded in tax in 2015 and 2016 happened because the Nigerian economy nose-dived owing to the global crash in world oil price.
Understanding VAT: VAT is a consumption tax placed on a product from production to the point of sale. It means a higher VAT on goods is borne by the final consumer of such goods.
In Nigeria, VAT is payable on goods and services consumed by any person, whether government agencies, business organization or individuals.
VAT in Nigeria is calculated at a flat rate of 5% of the cost of services and products and is charged on a wide array of goods and services. According to Section 8 sub 1 of the VAT Act, businesses are expected to register for VAT within the first six months of the start of the business in Nigeria.
Hyundai and Kia to set up an assembly plants in Ghana by 2022
The automobile giants will join Toyota-Suzuki, Nissan, Kantanka, Volkswagen, and Sinotruck who already have plants in Ghana.
Few weeks after Twitter announced its plans to open its first African office in Ghana, Hyundai and Kia have also concluded plans to set up an assembly plants in Ghana by 2022. The automobile giants will join Toyota-Suzuki, Nissan, Kantanka, Volkswagen, and Sinotruck who already have plants.
Ghana’s Minister for Trade and Industry, Alan Kyerematen announced this on Twitter.
Pleased to announce that Hyundai & KIA are set to establish assembly plants in Ghana by the end of 2022 to join Toyota-Suzuki, Nissan, Kantanka, Volkswagen & Sinotruck. The Ghana Auto Development programme = 3,600 assembly & 6,600 manufacturing parts jobs in Ghana. #InvestforJobs pic.twitter.com/JMHAmlM5VI
— Alan John Kyerematen (@AlanKyerematen) April 22, 2021
“Pleased to announce that Hyundai & KIA are set to establish assembly plants in Ghana by the end of 2022 to join Toyota-Suzuki, Nissan, Kantanka, Volkswagen & Sinotruck. The Ghana Auto Development program = 3,600 assemblies & 6,600 manufacturing parts jobs in Ghana.
“The local assembly of vehicles, 3,600 direct and indirect jobs would be created in Ghana, and the addition of components and parts manufacturing will also add about 6,600 direct and indirect jobs.”
Why this matters
More foreign companies are shunning Nigeria in favour of Ghana. Recently, Nairametrics reported that Amazon is set to situate its African Headquarters in South Africa, a multi-billion dollar investment that is projected to create over 20,000 jobs both directly and indirectly.
Following its move to Ghana, Twitter CEO, Jack Dorsey cited a number of human rights-related reasons for the choice of Ghana over Nigeria. Added to this are rising insecurity, stifling government regulations and the gapping infrastructural deficit bedevilling Nigeria. Consequently, our nation is steadily losing opportunities to attract foreign companies that could be very instrumental in bridging its unemployment gap which is currently over 30%.
Passports: Backlog of undelievered passports to be fixed before May 31st – Minister
The government also announced the launch of a new passport application system, which would be aided by fast track services nationwide.
The Federal Government disclosed that all backlogs of undelivered passport requests would be fixed before May 31st, and announced the launch of a new passport application system, which would be aided by fast track services nationwide.
This was disclosed by Minister of Interior, Rauf Aregbesola, in a press briefing with newsmen on Thursday.
What the Minister said
“On or before May 31st, all backlogs of undelivered requests for passports will be totally met, unless such applications have a problem,” he said.
“But before the deadline, the problematic application would be contacted, so that we know what’s wrong with the applications. Assuming there would be no problem, every successful application for a passport would be given a passport on or before May 31st,” he added.
The new passport process
The Minister disclosed that the FG will launch a new passport application process which would come into effect soon.
“When you finish your application process, there would be a waiting period of six weeks to collect your passport, however, if you want an express service, there would be fast track centres nationwide, to meet requests for express passport users,” he said.
What you should know
- Recall Nairametrics reported last month that the Federal Government inaugurated the Nigeria Immigration Service Passport Express Centre, which is a partnership with the private sector to enable the government offer passport services to Nigerians and make passports available in a maximum of 72 hours of a successful application.
- The FG also launched the Electronic Temporary Passport to cater for Nigerians desirous of returning home but whose national passport is not available.
Nairametrics | Company Earnings
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- Trans Nationwide Express Plc profit after tax slumps by over 95% in Q1 2021
- FCMB approves FY 2020 dividend pay-out of N2.97 billion to shareholders.
- Africa Prudential Plc posts profit after tax of N381.35 million in Q1 2021.
- Sovereign Trust Insurance Plc notifies stakeholders of 26th Annual General Meeting.
- Dangote Cement Plc to hold AGM on May 26th