Nigeria’s federal government through the Federal Inland Revenue Service (FIRS) generated a total of N588.59 billion as value-added taxes in the first quarter of the year, representing an 18.6% increase compared to N496.39 billion generated in the corresponding quarter of 2021.
Compared to the previous quarter, VAT revenue increased by 4.4% from N563.72 billion collected in the previous quarter (Q4 2021). This is according to the recently released VAT report by the National Bureau of Statistics (NBS).
Meanwhile, the manufacturing, information and communication, and mining sectors led the list of sectors with highest VAT remittances in the first quarter of 2022, jointly accounting for 36.1% of the total VAT revenue.
Highlights
- Total non-import VAT generated in the review period stood at N344 billion, accounting for 58.5% of the total VAT revenue in Q1 2022.
- Meanwhile, non-import VAT from foreign sources accounted for 20% of the total inflow at N117.99 billion, while Nigerian Custom Service VAT from imports stood at N126.57 billion.
- On a quarter-on-quarter basis, the Activities of extraterritorial organizations and bodies recorded the highest growth rate with 469.32%, followed by Water supply, sewerage, waste management and remediation activities with 47.62%.
- On the other hand, Agriculture, forestry and fishing had the lowest growth rate with 31.04% decline, followed by Real estate activities with 18.74% reduction.
In terms of sectoral contributions, the top three largest shares in Q1 2022 were Manufacturing with 32.84%; Information and Communication with 17.10%; and Mining and Quarrying with 11.85%.
Conversely, Activities of households as employers, undifferentiated goods and services-producing activities of households for own use recorded the least share with 0.04%, followed by Activities of extraterritorial organizations and bodies with 0.08%; and Water supply, sewerage, waste management and remediation activities with 0.16%.
Why this matters
- According to data tracked by Nairalytics, Nigeria recorded its highest quarterly VAT revenue in Q1 2022, which has seen significant improvement since the federal government reviewed the VAT rate upward to 7.5% in 2019.
- It is imperative for the federal government to improve its non-oil revenue considering the downward pressure on its oil revenue occasioned by the decline in crude oil production despite the sustained rally in oil prices.
- The Organization of the Petroleum Exporting Countries reported that Nigeria’s oil production fell to 1.024 million barrels per day (mbpd) in the month of May 2022, a 15.9% decline compared to 1.219mbpd recorded in the preceding month.
