The increase of the Value Added Tax rate from five percent to 7.5 percent has spurred an increase of tax receipts from N308.48 billion in Q4 2019 to N338.94 billion in Q1 2020, the National Bureau of Statistics (NBS) has revealed.
The improved performance represented a 9.87 percent increase in value quarter-on-quarter.
It also represented a 15.66 percent rise (year-on-year), when compared to the N293.04 billion realized in Q1 2019.
According to the sectoral distribution of VAT data for Q1 2020, which was published by the statistical agency, professional services generated the highest amount of VAT with N38.30 billion and closely followed by manufacturing that generated N37.37 billion.
Commercial and trading generated N17.19 billion while mining recorded the least amount of N61.83 million.
Textile and garment industry and local government councils recorded N306.05 million and N319.04 million respectively.
Of the total amount generated in Q1 2020, Non-Import VAT locally accounted for N172.67 billion while the foreign component stood at N93.67 billion.
The balance of N72.59 billion was generated as NCS-Import VAT, the NBS added.
Agriculture and plantations generated N973.26 million while automobile and assemblies contributed N751. 56 million to VAT within the review period.
Banks and other financial institutions contributed N5.42 billion while breweries, bottling, and beverages accounted for N14.33 billion VAT in Q1.
Commercial and trading, conglomerates, and federal ministries and parastatals contributed N17.18 billion, N1.10 billion, and N6.55 billion respectively to the total collections.
Oil-producing and oil marketing accounted for N9.35 billion and N2.38 billion respectively.
Recall that the rate of value-added tax (VAT) in Nigeria increased from 5% to 7.5% according to The Finance Act, 2019 provision which was signed by President Muhammadu Buhari on January 13, 2020, and became effective from February 1, 2020.
