Nigeria’s Value Added Tax Revenue Increases to N1.56 trillion

According to the National Bureau of Statistics (NBS) report on Value Added Tax revenue ₦1.56 trillion from VAT in Q2 2024, reflecting a  9.11% growth rate quarter-on-quarter (Q-o-Q), from ₦1.43 trillion in Q1 2024. This growth indicates an expansion in VAT collection.

The breakdown of VAT collections for the quarter includes ₦792.58 billion in local payments, ₦372.95 billion from import VAT, and ₦395.74 billion from foreign VAT. On a quarter-on-quarter basis, human health and social work activities recorded the highest growth rate of 98.44%, followed by agriculture, forestry, and fishing (70.26%), and water supply, sewerage, waste management, and remediation activities (59.75%).

Conversely, “Activities of Households as Employers, Undifferentiated Goods and Services of Households for Own Use” had the lowest growth rate, followed by real estate activities which grew by 42.59%. VAT collection increased by 99.82% year over year in Q2 2024 compared to Q2 2023, highlighting significant growth in tax revenue and a rebound in economic activity.

However, there are downsides to this increase, such as higher inflation and a decrease in disposable income, as businesses are likely to pass on increased production costs to consumers, through higher prices for goods and services. Therefore, the government must devise strategies to safeguard the most vulnerable members of society from the escalating prices of essential goods and services, and foster policies that stimulate growth in the business and manufacturing sectors, thereby increasing tax revenue from these transactions. SOURCE: CSEA AFRICA