VAT generates N588b for treasury

VAT generates N588b, a rise of 4.4% QoQ

By Jeph Ajobaju, Chief Copy Editor

Abuja generated N588.6 billion as Value Added Tax (VAT) in the first quarter ended March (Q1 2022), a 4.4 per cent quarter-on-quarter (QoQ) jump above N563.7 billion in Q4 2021, the latest report by the National Bureau of Statistics (NBS) says.

“Local payments recorded were N344.04 billion in Q1’22, while Foreign VAT Payment contributed N117.99 billion.

“On a QoQ basis, the activities of extraterritorial organisations and bodies recorded the highest growth rate with 469.32 per cent, followed by water supply, sewerage, waste management and remediation activities with 47.62 per cent,” the report explained.

Agriculture, forestry, and fishing had the lowest growth rate (31.04 per cent, followed by real estate activities (18.74 per cent).

The top three sectoral contributions were

• Manufacturing – 32.84 per cent
• Information and communication – 17.10 per cent
• Mining and quarrying – 11.85 per cent

“Conversely, activities of households as employers, undifferentiated goods – and services – producing activities of households for own use recorded the least share with 0.04  per cent followed by activities of extraterritorial organisations and bodies with 0.08 per cent; and water supply, sewerage, waste management and remediation activities with 0.16 per cent.

“However, on a year-on-year basis, VAT collections in Q1’22 increased by 18.58 per cent from Q1’21.”

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VAT revenue rises 35% to N2.1trn in 2021

VAT collection rose 35.4 per cent year-on-year (YoY) from N1.5 trillion in 2020 to N2.1 trillion in 2021, despite the dispute over the consumption tax in which Lagos joined Rivers in the Appeal Court, per Vanguard.

Rivers won the argument in August 2021 at the Federal High Court in Port Harcourt which ruled that only states have the constitutional right to collect VAT and should not be collected by the Federal Inland Revenue Service (FIRS).

The FIRS appealed to the Appeal Court in Abuja, where Lagos joined Rivers as a co-defendant. Rivers later raised the stakes by going to the Supreme Court even with the Appeal Court not having taken a decision on the case yet.

The Supreme Court has also not ruled on the case.

However, the Senate has voted against the request by the FIRS for VAT to be put on the exclusive legislative list.

NBS data on VAT revenue shows that  N563.7 billion was collected in Q4 2021, a 12.6 per cent YoY growth on N500.5 billion in Q3 2020 and 24.0 per cent on N454.7 billion in Q4 2020.