- Value Added Tax, VAT in Nigeria continues to be a major tax revenue cash cow in recent times.
Tax revenue to the rescue as Nigeria Records 4.21% Growth In VAT Q3 2022. The National Bureau of Statistics, NBS recently revealed that the Federal government generated ₦625.39 billion as Value Added Tax (VAT) in the third quarter of 2022.
The bureau revealed in its “Sectoral Distribution of Value Added Tax data for Q3 2022″ that the number depicts a growth rate of 4.21% quarter-on-quarter basis from ₦600.15 billion in Q2 2022 and a 24.95% increase year-on-year from Q3 2021.
It further disclosed that the Arts, entertainment, and recreation supply activities recorded the highest growth rate with 61.09%, followed by activities of extraterritorial organizations and bodies with 44.47%.
Nigeria Records 4.21% Growth In VAT, Q3 2022: More Perspective
The report also disclosed that activities of households as employers, undifferentiated goods and services-producing activities of households for own use had the lowest growth rate with –56.37%, followed by water supply, sewerage, waste management, and remediation activities with –32.02%.
As part of the total figure, local payments recorded were ₦367.93 billion, Foreign VAT Payments were N121.85 billion, while import VAT contributed ₦135.61 billion in Q3 2022.
According to the report, the sectors with the highest contribution in Q3 2022 were manufacturing at 31.08%, information and communication at 18.52%, and mining & quarrying at 10.95%.
The National Bureau of Statistics (NBS)
The National Bureau of Statistics (NBS) is an official office of the Nigerian government that provides statistical information on the country.
The site provides its information using customized reports, an online data analysis tool, information by state, a press center, and a data portal.
NBS was established with the consolidation of the Federal Office of Statistics (FOS) and the National Data Bank (NDB).
The creation was part of the implementation of the Statistical Master Plan (SMP), a program document of the Federal Government of Nigeria (FGN).
Value Added Tax (VAT)
Value Added Tax (VAT) is a consumption tax that is paid when goods are bought and services are provided. It is charged at a rate of 7.5%.
VAT is administered by the Federal Inland Revenue Service (FIRS).
It was introduced in Nigeria with the execution of VAT Act No. 102 of 1993, which supplanted the Sales Tax, which had been in operation since 1986 under the Federal Government Decree No. 7 of 1986.
All goods and services manufactured within or imported into the country are liable to tax, except those specifically absolved by the VAT Act.
VAT is a multi-stage tax that is usually assumed by the final consumer.
All taxable persons are expected to file VAT monthly returns on or before the 21st day following the month of the transaction.
Under the Nigerian VAT regime, the three groups of taxpayers who are compelled to deduct VAT at source and send it directly to the tax authority are:
- Nigerian companies that are carrying on VATable transactions with non-resident companies within the country.
- Government ministries, statutory bodies, and other agencies of government.
- Companies operating in the oil and gas sector.
Follow us on Twitter for more update
The information contained herein is general and is not intended, and should not be taken, as legal, accounting or tax advice provided by Taxmobile.Online Inc to the reader. This information remains strictly the opinion of Taxmobile.Online Inc.
The reader also is cautioned that this material may not apply to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of other tax factors if any action is to be contemplated. The reader should contact his or her Tax Advisers before taking any action based on this information.
All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Taxmobile.Online Inc.