Business and Economy

VAT Revenue grows by 26.61% in Q4 of 2023

The Value Added Tax (VAT) report released by the National Bureau of Statistics (NBS) for the fourth quarter of 2023 indicates a rise in revenue. VAT increased by 26.61 percent from N948.07 billion in the third quarter of 2023 (Q3 2023) to N1.20 trillion in the fourth quarter of 2023 (Q4 2023). Year-on-year, VAT collections surged from N697.37 billion in Q4 2022, marking a growth of approximately 72.12 percent.

This growth rate surpasses the inflation rate, signifying a real increase in VAT. The VAT collected from local payments, international payments, and import VAT in the quarter totaled N630.00 billion, N326.27 billion, and N244.04 billion, respectively. Sector-wise analysis reveals that the agricultural sector saw the highest growth rate at 63.75 percent, followed by other services activities at 61.98 percent. Conversely, ‘financial and insurance’ and activities of extraterritorial organizations experienced negative growth rates of 8.46 percent and 19.44 percent, respectively.

Furthermore, the total VAT collection for 2023 reached a record N3.64 trillion, up from N2.51 trillion in 2022, reflecting a growth rate of 45.01 percent. This growth is indicative of reduced revenue leakages and enhanced tax administration efforts in line with the current administration’s revenue generation goals. To sustain this growth, the government should continue to utilize digital platforms for efficient VAT collection and monitoring. Additionally, improving service delivery is crucial to boost voluntary tax compliance.

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