VAT is Value-Added Tax. It is a consumption tax on goods and services that is levied at each stage of the supply chain where value is added, from initial production to the point of sale.
VAT is commonly expressed as a percentage of the total cost. For example, if a product costs $100 and there is a 15% VAT, the consumer pays $115 to the merchant. The merchant keeps $100 and remits $15 to the government.
The National Bureau of Statistics (NBS) said the federal government generated N2.07 trillion as Value Added Tax (VAT) last year.
This represents a 33 percent Year-on-Year (YoY) increase in VAT when compared to N1.55 trillion generated in 2020.
Findings from the data in NBS’ Sectoral Distribution of VAT Report for fourth quarter of 2021, Q4’21, released at the weekend, show that VAT stood at N512.2 billion in Q1’21 and fell by 3.16 per cent to N496 billion in Q2’21.
In Q3’21 VAT rose marginally by 0.88 per cent to N500.4 billion and up by 12.6 per cent to N563.7 billion in Q4’21.
The bureau stated:”On the aggregate, VAT for Q4’21 was reported at N563.72 billion, a growth of 12.63 per cent on a quarter-on-quarter (QoQ) basis from N500.49 billion in Q3’21.
“Local payments recorded were N333.29 billion in Q4’21, while Foreign VAT Payment contributed N103.52 billion.
“On a QoQ basis, the activities of extraterritorial organizations and bodies recorded the highest growth rate with 150.16 per cent, followed by agriculture, forestry and fishing with 92.48 per cent . “On the other hand, arts, entertainment and recreation had the lowest growth rate with -7.07 per cent, followed by education with -5.69 per cent .
“In terms of sectoral contributions, the top three largest shares in Q4’21 were manufacturing with 30.86 per cent; information and communication with 18.72 per cent and mining and quarrying with 9.91 per cent.
“Conversely, the activities of extraterritorial organizations and bodies recorded the least share with 0.02 per cent, followed by activities of households as employers, undifferentiated goods and services-producing activities of households for own use with 0.04 per cent; and water supply, sewerage, waste management and remediation activities with 0.11 per cent.
“However, on a YoY basis, VAT collections in Q4’21 increased by 23.98 per cent from Q4″20.”
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