- Nigeria’s Value Added Tax (VAT) increased by 1.75% on a quarter-on-quarter basis, reaching N709.59 billion in Q1 2023.
- The manufacturing sector accounted for the largest share of VAT collection in Q1 2023 at 29.65%.
- Information and communication followed with a share of 19.29%, while mining & quarrying contributed 12.24% to VAT collection during the same period.
Nigeria’s Value Added Tax (VAT) recorded a quarter-on-quarter increase of 1.75%, rising from N697.38 billion in Q4 2022 to N709.59 billion in the first quarter of 2023.
This data was revealed in the recently released VAT Q1 2023 report by the National Bureau of Statistics on Tuesday. The report also highlighted the sectors that contributed the most to VAT collection during this period, with manufacturing leading at 29.65%, followed by information and communication at 19.29%, and mining & quarrying at 12.24%.
Growth
According to the report, Value Added Tax (VAT) for Q1 2023 was reported at N709.59 billion, showing a growth rate of 1.75% on a quarter-on-quarter basis from N697.38 billion in Q4 2022, they added:
- “Local payments recorded were N436.10 billion, Foreign VAT Payments were N151.13 billion, while import VAT contributed N122.37 billion in Q1 2023.
- “ On a quarter-on-quarter basis, the activities of households as employers, undifferentiated goods- and services producing activities of households for own use recorded the highest growth rate with 349.86%, followed by construction with 95.64%.”
Activities
NBS noted that the activities of extraterritorial organizations and bodies had the lowest growth rate with –53.54%, followed by real estate activities with –47.01%, as manufacturing contributed the most, they said:
- “In terms of sectoral contributions, the top three largest shares in Q1 2023 were manufacturing with 29.65%; information and communication with 19.29%; and mining & quarrying with 12.24%.
- “ Conversely, activities of extraterritorial organizations and bodies recorded the least share with 0.02%, followed by activities of households as employers, undifferentiated goods- and services-producing activities of households for own use with 0.03%; and water supply, sewerage, waste management, and remediation activities with 0.04%.”
They revealed that on a year-on-year basis, VAT collections in Q1 2023 increased by 20.56% from Q1 2022.
What you should know
Nigeria generated a sum of N2.51 trillion as Value Added Tax (VAT) in 2022, marking a 21.2% increase compared to N2.07 trillion recorded in the previous year.
N1.48 trillion was generated as local non-import VAT, N510.8 billion was generated as foreign non-import VAT, and Nigeria Customs Service (NCS) remitted N521.5 billion VAT.
Further breakdown of the data showed that the highest VAT was recorded in the fourth quarter at N697.38 billion, followed by N625.39 billion recorded in Q3 2022. Meanwhile, a sum of N600.15 billion was generated in Q2 2022 while N588.59 billion was recorded in the first quarter.
Nigeria’s VAT revenue has grown significantly in recent years, following the increment of the VAT rate from 5% to 7.5% in 2020. Since the review of the VAT rate, Nigeria’s revenue from VAT collection has doubled. Interestingly, the N2.51 trillion recorded in 2022 is the highest on record.