FG Earns N496Billion VAT in Q1

The federal government earned N496.39 billion as Value Added Tax (VAT) in the first quarter of the year, according to the National Bureau of Statistics (NBS).

This is against N454.69 billion generated in the fourth quarter (Q4) 2020 and N324.58 billion generated in Q1 2020.

The Bureau disclosed this in its “Sectoral Distribution of Value Added Tax Data for Q1 2021”, released at the weekend.

NBS said the figure represents a 9.17 per cent increase Quarter-on-Quarter and 52.93 per cent increase Year-on-Year.

 The manufacturing sector generated the highest amount of VAT with N49.41 billion, closely followed by professional services generating N42.50 billion.

It said ministries and parastatals generated N26.96 billion while mining generated the least and closely followed by textile and garment industry with N48.36 million, N77.01 million and N289.41 million generated respectively.

“Out of the total amount generated in Q1 2021, N224.85 billion was generated as Non-Import VAT locally while N171.66 billion was generated as Non-Import VAT for foreign.

According to the report, the balance of N99.88 billion was generated as Nigeria Customs Service (NCS) -Import VAT.

VAT is a consumption tax which is administered by the Federal Inland Revenue Service (FIRS).

It was introduced in Nigeria with the enactment of VAT Act No. 102 of 1993, which replaced the Sales Tax, which had been in operation since 1986 by virtue of the Federal Government Decree No. 7 of 1986.

VAT used to be five per cent. However, on January 13, 2020, it was jerked to 7.5 per cent after President Muhammadu Buhari signed the Finance Act 2020 into law.

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