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Market Digest Nigeria

Business

Nigeria generates N2.9tn from VAT, CIT

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Nigeria generated a total of N2.94 trillion in income from value-added tax (VAT) and company income tax (CIT) last year, data released by the National Bureau of Statistics (NBS), have revealed.

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The figure is about 10 per cent higher than the N2.68 billion recorded the previous year.

The breakdown shows that the third quarter (Q3) recorded the largest performance with a total of N840.7 billion while N620 billion, the least quarterly performance, was recorded in Q1.

VAT accounted for N1.53 trillion or 52 per cent was the total figure, N1.41 trillion was sourced from CIT. The CIT income is 13.5 per cent short of the N1.63 trillion generated from the same source in 2019.

Professional services (including telecoms) and banks/other financial institutions led last year’s CIT revenue drive with N180.3 billion and N96.4 billion respectively. While banks and other financial institutions’ contribution to the CIT fell by about 48 per cent (compared to N142.7 billion realised from the sector in 2019), professional service improved slightly, rising from N177.7 billion generated from the sector in 2019 to N180.3 billion.

Other top contributors to CIT incomes are other manufacturing (N80.2 billion), commerce and trading (N65.6 billion), breweries, bottling and beverages (N53.2 billion), state ministries and parastatals (N49 billion), transport and haulage (N45.5 billion), oil-producing (N40.8 billion) and federal ministries and parastatals (N22.5 billion).

The laggards were the textile and garment industry (N360 million), mining (N343.2 million), local government councils (N1.1 billion), chemicals, paints and allied industries (N2 billion) and publishing, printing and packaging (N2.1 billion).

Textile and garment recorded highest year-to-date (YTD) improvement with 100 per cent jump in its CIT generation while the contribution of petrochemical and petroleum refineries fell by 45 per cent YTD to top the least improved sectors.

Recall that VAT was increased from five per cent to 7.5 per cent as contained in the Finance Act 2019. The increase took effect on February 1, 2020.

According to sectoral analysis sourced from the NBS data, the government received N763 billion from non-import (local) VAT, N420.4 billion from non-import (foreign) VAT and N347.7 billion from the Nigeria Customs Service (NSC)-import VAT.

Professional service recorded N162.3 billion to emerge as the top contributing sector followed by other manufacturing with N154.2 VAT revenue. Mining recorded N251 million to take the least position in terms of value addition to VAT revenue.

 

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