Monday , January 17 2022
Nigeria Generates N1 Trillion from VAT in H1 2021 - NBS

Nigeria Generates N1 Trillion from VAT in H1 2021 – NBS



Nigeria generated N1 trillion from Value Added Tax (VAT) in the first half of the year 2021, consisting of N512.25bn in the second quarter and N495.39bn generated in the first quarter.

The figures were contained in the ‘Sectoral distribution of Value Added Tax’ report released on Tuesday by the National Bureau of Statistics.

The report read, “Sectorial distribution of Value Added Tax data for Q2 2021 reflected that the sum of N512.25bn was generated as VAT in Q2 2021 as against N496.39bn generated in Q1 2021 and N327.2bn generated in Q2 2020 representing 3.20 per cent increase Quarter-on-Quarter and 56.56 per cent increase Year-on-Year.”

The NBS disclosed that out of the total VAT generated, N187.43bn constituted Non-Import VAT locally while N207.69bn was generated as Non-Import VAT for foreign.

The balance of N117.13bn was generated from the Nigerian Customs Service Import VAT.

The report also noted that by sector, other Manufacturing generated the highest amount of VAT with N44.89bn, followed by Professional Services which generated N29.30bn and Commercial and Trading, N21.96bn.

Click Here To Read: FG May Raise VAT to 15 Percent Before 2025- Report

Taiwo Oyedele, Head of Tax and Regulatory Services and Tax Services Leader West Africa of PricewaterhouseCoopers Nigeria, cautioned that “VAT can easily become complicated if you allow states to pass their own laws and to enact it and administer it”.

If this judgement stays, he is worried that Nigeria will “have different rates, banks, telecommunications and people doing businesses in different states will have to deal with different rates with different authorities”.

Oyedele said what the judgment has done, “is to emphasize what is in the constitution that it is a state tax. I don’t think the judgement has gone to the extent of saying that you cannot bend by understanding to ask someone else to collect the tax for you”.

He described court ruling as “very crucial and fundamental. It changes everything, if it is eventually upheld all the way to the Supreme Court, it changes everything. It means that the VAT law itself is unconstitutional which means that it has to be repealed it has to mean a new law either in the style and so forth.” READ:

With regards to PIT which was also adjudicated upon, Oyedele said: “For Personal Income Tax, it is a state tax, enacted centrally but collected by different states so we’ll end up with a similar style of VAT which cannot be sustained.”

In terms of the impact on government, Oyedele said “the only winner from this judgment if sustained is Lago state. Many of the other states like 30 states or more will be worse off. I expect Rivers State to be worse off but they might be one of the few states that may be neutral maybe not significantly worse off and not significantly better.

“As of today, VAT revenue is somewhere around N1.8 trillion out of that amount, Customs which is Import/VAT is over N200 billion. No state can claim that even if you change the law today, Customs/ VAT will still be federal government.


About Bukola Olanrewaju

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