The Federal Government of Nigeria’s value added tax (VAT) revenue collections expanded 29.84 per cent to ₦424.71 billion in the third from ₦327.2 billion in the second quarter of 2020.
The detail of the amount generated was gathered from National Bureau of Statistics (NBS) sectoral distribution of VAT Data for Q3 2020.
The Bureau of Statistics report revealed that total sum of ₦275.12 billion was generated in Q3 2019 when VAT rate was 5 per cent.
According to NBS, while 2020 figure represents 29.8 per cent increase on quarter on quarter basis, it translated to 54.37 per cent increase when compare with amount collected in the third quarter of 2019.
It said that manufacturing generated the highest amount of VAT with ₦47.07 billion, closely followed by professional services generating ₦44.01 billion.
NBS noted in the report that commercial and trading generated ₦21.18 billion, while mining generated the least with N64.50 million.
This was closely followed by textile and garment industry with ₦346.27 million and pharmaceutical, soaps and toiletries, which had ₦386.16 million.
Out of the total amounted generated in Q3 2020, ₦214.66 billion was generated as Non-Import VAT locally, while ₦115.34 billion was generated as Non-Import VAT for foreign.
The report said the balance of ₦94.70 billion was generated as Nigeria Customs Service-Import VAT.
Analysts believe that the increase in VAT rate is responsible for the surge reported despite pressure in the economy.
Recalled that VAT which used to be five per cent was on January 13, 2020 reviewed to 7.5 per cent after President Muhammadu Buhari signed the Finance Act 2020 into law.