Data recently released by the National Bureau of Statistics (NBS) revealed that Nigeria generated N289.04 billion in Value Added Tax (VAT) in the first quarter of 2019. The figure however shows a drop of 3 percent when compared to N298.01 billion generated in the last quarter of 2018. But a 7 percent growth compared to the N269.79 billion generated in first quarter of 2018.
VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed. – Investopedia
Further analysis of the Sectorial Distribution of VAT report for first quarter, 2019 posted on the NBS website revealed that Local non-import VAT contributed N137 billion representing 47 percent while Foreign non-import VAT contributed N99 billion representing 34 percent and NCS Import VAT contributed N53 billion representing 18 percent of the total VAT figure for Q1, 2019. Foreign non-import VAT grew by 107 percent while Local non-import VAT and NCS Import VAT dropped by 1 percent and 53 percent respectively QonQ.
Other Manufacturing, Professional Services and Commercial and Trading classifications contributed the most to the Local non-import VAT with N31 billion, N24 billion and N15 billion representing 21 percent, 18 percent and 11 percent respectively. While Agriculture, Automobile, Chemical and Allied products, Mining, Offshore Operations, Petrochemical, Pharmaceutical, Property, Publishing and Textiles all contributed less that 1 percent to the Local non-import VAT in Q1, 2019.
Pioneering sector had the highest QonQ growth of 119 percent followed by Chemical, Paint and Allied Industry with a 102 percent growth while 11 sectors namely: Commercial and Trading, Gas, Hotel and Catering, Offshore Operations, Oil Production Petrochemical, Properties, State Ministries and Textile and Garment all had negative QonQ growth in Value Added Tax.
20 of the 28 sectorial classifications under Local non-import VAT had positive YonY growth while only 8 namely: Automobiles, Bank and Financial Institutions, Commercial Trading, Offshore Operations, Oil Marketing, Petrochemical, Pharmaceutical and State Ministries had negative growth YonY.
Only 5 sectors (Commercial and Trading, Offshore Operations, Petrochemicals, Pharmaceutical and State Ministries) had both QonQ and YonY negative growth.