NBS: VAT revenue dropped by 11bn to N500bn in Q3 2021

The total value-added tax (VAT) collected on behalf of the federation decreased by N11.75 billion within three months to N500.49 billion in the third quarter of 2021.

The National Bureau of Statistics (NBS) said this in its latest report released on Monday.

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

In the last quarter, VAT collection amounted to N512.25 billion. 

Year-on-year, there was an improvement in the collection as the FIRS collected N496.39 billion, N512.25 billion and N500.49 billion in the first, second and third quarters of 2021.

This is higher compared to the corresponding figures of 2020 at N324.58 billion, N327.20 billion and N424.71 billion, respectively.

It shows growth rates of 52.93 percent in Q1 2021, 56.56 percent in Q2 2021 and 17.84 percent in Q3 of 2021.

Further analysis shows that in Q3 2021, the manufacturing activity; information and communication activity; and mining & quarrying activity accounted for the top three largest shares of total revenue collected sector-wise, representing 30.87 percent (N91.2 billion), 20.05 percent (N59.3 billion), and 9.62 percent (N28.4 billion), respectively.

On the flip side, activities of extraterritorial organisations and bodies generated the least VAT in the quarter under review with N20.15 million. This was followed by activities of households as employers, undifferentiated goods and services (N90.83 million) and water supply, sewerage, waste management and remediation activities (236.75 million). 

Nigeria had raised its VAT rate from 5 percent to 7.5 percent in 2020 — but the International Monetary Fund (IMF) had also advised that the rate should be increased to at least 10 percent by 2022.

On the other hand, first and second quarter 2021 Company Income Tax (CIT) collections were N392.65 billion and N472.07 billion, respectively, higher than the corresponding quarter of last year.

By the third quarter of 2021, this has increased to N472.52 billion, yet higher than Q3 of the previous year.