Rate increase pushes VAT revenue to N339bn in Q1

The federal government has generated additional N30.46 billion in the first quarter of the year (Q1 2020) based on the hike in value added tax (VAT) from five per cent to 7.5 per cent that became effective from February 1, according to data released yesterday by the National Bureau of Statistics (NBS).

The NBS figures were released just as the Mrs. Zainab Ahmed, minister of finance, budget and national planning, met with the National Assembly leadership in Abuja yesterday to discuss the proposed cut in the 2020 Budget.

The cut, which amounted to N71.5 billion, according to analysts, should reflect the country’s economic realities.

With the extra cash, VAT receipts closed at N338.94 billion in the first quarter of the year, from N308.48 billion in Q4 2019.

The improved performance represented a 9.87 per cent increase in value quarter-on-quarter.

It also represented a 15.66 per cent rise (year-on-year), when compared to the N293.04 billion realised in Q1 2019.

According to the sectoral distribution of VAT data for Q1 2020, which was published by the statistical agency, professional services generated the highest amount of VAT with N38.30 billion and closely followed by manufacturing that generated N37.37 billion.

Commercial and trading generated N17.19 billion while mining recorded the least amount of N61.83 million.

Textile and garment industry and local government councils recorded N306.05 million and N319.04 million respectively.

Of the total amount generated in Q1 2020, Non-Import VAT locally accounted for N172.67 billion while the foreign component stood at N93.67 billion.

The balance of N72.59 billion was generated as NCS-Import VAT, the NBS added.

Agriculture and plantations generated N973.26 million.