The manufacturing sector was the highest contributor as Nigeria generated N625.39 billion from Value Added Tax (VAT) for the third quarter of 2022, the National Bureau of Statistics (NBS) has said.
In its report released on Monday, the NBS said the VAT for Q3’22 showed a growth rate of 4.21% on a quarter-on-quarter basis from N600.15 billion in Q2 2022.
N588bn was generated in Q1’22 while N600bn was derived in Q2’22.
VAT is 7.5% consumption tax paid when goods are purchased and services are rendered. It is administered by the Federal Inland Revenue Service (FIRS) and disbursed to the federal, state and local governments through the Federation Accounts Allocation Committee (FAAC).
Giving an analysis of the N625.39 VAT generated in Q3’22, the NBS said local payments recorded were N367.93 billion, foreign VAT payments were N121.85 billion, while import VAT contributed N135.61 billion.
“On a quarter-on-quarter basis, the Arts, entertainment, and recreation supply activities recorded the highest growth rate with 61.09%, followed by Activities of extraterritorial organizations and bodies with 44.47%,” the report partly read.
“On the other hand, Activities of households as employers, undifferentiated goods and services-producing activities of households for own use had the lowest growth rate with –56.37%, followed by Water supply, sewerage, waste management, and remediation activities with –32.02%.
“In terms of sectoral contributions, the top three largest shares in Q3 2022 were Manufacturing with 31.08%; Information and communication with 18.52%; and Mining & quarrying with 10.95%.
“Conversely, Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.01%, followed by Activities of extraterritorial organizations and bodies with 0.06%; and Water supply, sewerage, waste management, and remediation activities with 0.08%. However, on a year-on-year basis, VAT collections in Q3 2022 increased by 24.95% from Q3 2021.”
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Similarly, the Company Income Tax (CIT) for Q3 2022 was reported at N810.19 billion, indicating a growth rate of 13.41% on a quarter-on-quarter basis from N714.40 billion in Q2 2022.
VAT collection has witnessed major controversies in recent times. In March, the National Assembly rejected a bill seeking to include VAT in the Exclusive List. The move followed a protracted legal tussle between the Federal Inland Revenue Service (FIRS) and the Rivers State Government over VAT collection and personal income tax (PIT) in the state.
Last year, Governor Nyesom Wike of Rivers signed a bill on VAT collection into law, lamenting what he called injustice in the country especially in the area of resource allocation.
Wike said Rivers State generated N15bn VAT revenue in June 2021 but got N4.7bn in return, while Kano generated N2.8bn in the same month and got the same N2.8bn back.
The Rivers governor also said N46.4bn was collected from Lagos State in the same month but the Federal Government gave Lagos N9.3bn. “Sometimes, you don’t want to believe these things exist,” he had said.
The case has been in court for over a year with no end in sight.
