Nigeria has recorded a 52.93% increase in the funds generated as Value Added Tax (VAT) to N496.39 billion in the first quarter of 2021 (Q1 2021) from N324.58 billion generated in the same period in 2020.
This is contained in a report by the National Bureau of Statistics (NBS) in a title, ‘Sectoral Distribution Of Value Added Tax (Q1 2021)’.
According to the report, “Sectoral distribution of Value Added Tax (VAT) data for Q1 2021 reflected that the sum of N496.39bn was generated as VAT in Q1 2021 as against N454.69bn generated in Q4 2020 and N324.58bn generated in Q1 2020 representing 9.17% increase Quarter-on-Quarter and 52.93% increase Year-on-Year.
“Other Manufacturing generated the highest amount of VAT with N49.41bn generated and closely followed by Professional Services generating N42.50bn, State Ministries & Parastatals generating N26.96bn while Mining generated the least and closely followed by Pioneering and Textile and Garment Industry with N48.36m, N77.01m and N289.41m generated respectively.
“Out of the total amounted generated in Q1 2021, N224.85bn was generated as Non-Import VAT locally while N171.66bn was generated as Non-Import VAT for foreign. The balance of N99.88bn was generated as NCS-Import VAT.
What is VAT?
Value Added Tax (VAT) is a consumption tax paid when goods are purchased and services rendered.
VAT is borne by the final consumer, that is all goods and services (produced within or imported into the country) are taxable except those specifically exempted by the VAT Act.
VAT is governed by Value Added Tax Act Cap V1, LFN 2004 (as amended). It is a multi-stage tax. It is charged at a rate of 7.5%. Some goods and services such as non-oil exports are zero rated.
All taxable persons are required to file VAT monthly returns not later than 21st day following the month of transaction