The manufacturing, ICT and mining sectors led the list of sectors in Nigeria with the highest VAT remittances in the first half of 2022, jointly accounting for 62.2% of the total value added tax revenue generated by the Federal Inland Revenue Service (FIRS) between January and June 2022.
VAT revenue in the first half of the year increased by 11.7% to N1.19 trillion from N1.06 trillion generated in the second half of the previous year. This is according to the VAT report released by the National Bureau of Statistics (NBS)
Also, compared to the corresponding period of 2021 VAT revenue increased by 17.9% from N1.01 trillion generated in H1 2021. A further breakdown of the report showed that N703.17 billion was generated as local non-import VAT, while N229.12 billion was from foreign non-import VAT.
VAT revenue has been on a steady increase in the last three years when the federal government increased VAT rate from 5% to 7.5% in a bid to increase government revenue. The disaggregated report showed that a sum of N600.15 billion was generated as VAT revenue in Q2 2022, representing the highest quarterly income on record based on data from Q1 2013.
Meanwhile, N256.46 billion was generated from the Nigeria Customs Service (NCS) import VAT, which increased by 2.3% compared to N250.66 billion generated in the second half of 2021. The manufacturing sector contributed the highest quota to the VAT collection in the period under review with N231.8 billion remittance, representing 33% of the total collections.
In terms of VAT remittance growth, companies involved in extraterritorial activities saw their VAT remittance grow by 541.1% in H1 2022 to N452.43 million from N70.57 million paid in H2 2021. Water supply, sewerage, waste management, and remediation activities followed with a 65.9% growth in VAT payment to N1 billion.
Highest contributing sectors to VAT:
Manufacturing – N231.78 billion
The manufacturing sector remitted the highest VAT of N231.78 billion between January and June 2022. This is 19.44% higher than the N194.06 billion remitted in the second half of the previous year. The manufacturing sector accounted for 33% of the total VAT inflows recorded by the FIRS in the review period.
A cursory look at the GDP numbers shows that the manufacturing sector, which comprises of oil refining, cement production, food, textile, chemical, and other manufacturing accounted for 8.6% of the country’s real GDP, with an estimated value of N1.49 trillion in the second quarter of the year.
ICT – N127.03 billion
The information and communication sector, comprising of companies in the telecommunication industry, publishing, motion pictures, and broadcasting remitted N127.03 billion as value added taxes in H1 2022, an increase of 4.4% compared to H2 2021 (N121.64 billion.
The ICT sector accounted for 18.1% of the total VAT revenue collected between January and June 2022. In terms of GDP numbers, the ICT sector accounted for 18.4% of the total real GDP in Q2 2022 with an estimated value of N3.19 trillion.
Mining and Quarrying – 78.86 billion
The mining and quarrying sector, which has been identified as one of the fastest growing sectors of the Nigerian economy in the second quarter of the year, remitted a sum of N78.86 billion to the federal purse as value added tax in the first half of the year. Its VAT remittance increased by 28.3% compared to N61.47 billion remitted in the second of 2021.
Also, it accounted for 11.2% of the total VAT revenue in the period under review. The mining and quarrying sector includes companies involved in crude petroleum, coal mining, metal ores, quarrying, and other mineral extractions accounting for 6.5% of Nigeria’s Q2 2022 real GDP.
- Others on the list include the public administration, defense, and compulsory social security sector, which remitted a sum of N57.17 billion as value-added tax in H1 2022, while the financial and insurance sector followed with N51.61 billion remittance.
- Other service activities remitted N33.34 billion, Wholesale and retail trade, repair of motor vehicles and motorcycles (N30.52 billion), Transportation and storage (N29.07 billion), and Professional, Scientific and Technical activities (N13.13 billion) followed in that order.
Okay, that sounds good. But i think Nigeria has a whole lot more to offer. With the right leadership we will be at our best.
Nigeria needs more than just the so-called “right leadership”.
Just as important as leadership, it also needs a committed CITIZENRY. Using a religious analogy, even Jesus cannot lead you to salvation without your own belief and work.
Nigeria are fighting both internal and external enemies how can foreign currency that has no security base be more value than us who are far more wealtyy