Nigeria’s VAT assortment hits N1.78 trillion in Q3 2024  

The Nigerian authorities raked within the sum of N1.78 trillion from Worth Added Tax (VAT) within the third quarter of 2024.

The Nationwide Bureau of Statistics (NBS) disclosed this in its newest VAT report.

The Q3 VAT determine represents a 14.16% quarter-on-quarter enhance in comparison with the N1.56 trillion collected in Q2 2024 and an 88% year-on-year progress from Q3 2023.

Breakdown of VAT contributions 

The N1.78 trillion VAT income was pushed by contributions from three key streams:

• Native VAT Funds: N922.87 billion
• Overseas VAT Funds: N448.85 billion
• Import VAT: N410.62 billion

Human well being and social work actions led the pack with the best progress charge of 250.39% quarter-on-quarter, adopted by actions of households as employers and undifferentiated items and services-producing actions for family use, which grew by 102.09%.

Conversely, some sectors recorded vital declines. These embrace water provide, sewerage, waste administration, and remediation actions, which fell by 41.92%, the sharpest decline amongst sectors.

Actions of extraterritorial organizations and our bodies additionally dropped by 36.14%.

Sectoral contributions 

When it comes to contributions to the general VAT pool, the top-performing sectors in Q3 2024 had been:

• Manufacturing: 22.21%
• Info and Communication: 20.89%
• Mining and Quarrying Actions: 18.90%

On the decrease finish of the spectrum had been actions of households as employers and undifferentiated family actions, contributing 0.01%.

Actions of extraterritorial organizations and our bodies, additionally contributed 0.01%, whereas water provide, sewerage, waste administration, and remediation actions, contributed 0.03%.

The Q3 2024 VAT collections confirmed outstanding progress on a year-on-year foundation, recording an 88% enhance from Q3 2023.

This reveals the federal government’s efforts to reinforce income technology by tax administration and compliance.

What you need to know 

The VAT information comes amid ongoing debates over the brand new sharing formulation for the income as proposed within the new tax reform payments at present earlier than the Nationwide Meeting.

The brand new tax payments into account proposes adopting a derivation precept within the allocation of VAT revenues between the federal authorities and sub-national entities.

• Beneath the present Part 40 of the VAT Act, VAT income is allotted as follows: 15% to the Federal Authorities, 50% to the States and Federal Capital Territory (FCT), and 35% to Native Governments.
• The allocation to states and native governments incorporates a derivation precept of a minimum of 20%. Though not explicitly detailed within the VAT Act, different components influencing distribution embrace 50% primarily based on equality and 30% primarily based on inhabitants.
• Moreover, 4% of collections are allotted to the Federal Inland Income Service (FIRS) as a set payment, whereas 2% goes to the Nigeria Customs Service (NCS) for import VAT.

Nevertheless, Governors of the 19 Northern states, together with conventional rulers and stakeholders from the area, have expressed opposition to the invoice, significantly in regards to the draft for VAT distribution primarily based on derivation. Most lawmakers from the Northern bloc have aligned with their place.