By Jeph Ajobaju, Chief Copy Editor
Nigeria generated N1.53 trillion Value Added Tax (VAT) in 2020, up 29.3 per cent on the N1.18 trillion in 2019 and 38.2 per cent greater than the N1.11 trillion in 2018, according to a report by the National Bureau of Statistics (NBS).
A breakdown of the figures done by Nairametrics shows that
· In 2020, professional services generated the highest VAT with N162.32 billion followed by other manufacturing sectors with N154.15 billion.
· Non-import VAT generated locally grew 30.5 per cent in 2020 to N763.01 billion against N584.6 billion in 2019.
· Non-import foreign VAT was N420.4 billion, an increase of 17 per cent compared to N359.5 billion in 2019.
· Import VAT generated by the Nigeria Customs Service (NIS) jumped 44.6 per cent to N347.7 billion against N240.5 billion in 2019.
· Out of 28 sectors, 24 had positive VAT growth, only four recorded a decline.
· VAT remittance by the transport and haulage services sector grew 78.8 per cent to N43.5 billion, and agricultural and plantation sector 65.4 per cent to N4.34 billion.
Despite economic downturn caused by lockdown measures to check the spread of coronavirus and decline in global oil prices, VAT increased significantly in 2020, attributable to the rise in VAT from 5 per cent to 7.5 per cent.
In 2019, other manufacturing sector topped the list with N124.14 billion in VAT. But in 2020, professional services took over with a 44.8 per cent increase to N162.32 billion.
Other manufacturing followed with N154.2 billion, Commercial and trading (N77.4 billion), Breweries, bottling, and beverages (N59.7 billion), state ministries and parastatals (N59 billion).
Other sectors in the top 10 VAT sources include transport and haulage services (N43.5 billion), oil-producing (N43.4 billion), federal ministries and parastatals (N26.3 billion), banks and financial institutions (24.8 billion), and unclassified sector (N22.9 billion).
Mining generated the lowest VAT of N250.9 million.
Others include textile and garment industry (N1.19 billion), pharmaceutical, soaps and toiletries (N1.4 billion), local government councils (N1.9 million), and publishing, printing, paper packaging (N2.08 billion).
VAT growth not enough
Nairametrics recalls that in the 2019 budget, Nigeria projected N1.7 trillion VAT anticipating higher tax revenues from goods and services but achieved N1.18 trillion or 69.8 per cent of the target.
In 2020, the treasury achieved 75.4 per cent of targeted N2.03 trillion VAT or N1.53 trillion.
Nigeria’s 2021 budget deficit of N5.6 trillion is expected to be funded through both domestic and foreign borrowings.
Oil prices are still around $50 per barrel and the resurgent cases of Covid-19 worldwide put pressure on oil revenue as the country aims to recover from a recession induced by the pandemic.