Adedapo Adesanya
By Adedapo Adesanya
The Value Added Tax (VAT) generated by the federal government grew by 29.8 per cent in the third quarter (Q3) of the year to N424.7 billion as against N327.2 billion generated in the second quarter.
This was disclosed by the National Bureau of Statistics (NBS) in its report titled Sectoral Distribution of Value Added Tax Data for Q3 2020 released on Monday in Abuja.
According to the report, the amount generated in the quarter under review was 53.4 per cent higher than N275.1 billion generated in the same period of 2019.
According to a breakdown, the manufacturing sector generated the lion share of VAT in the period with N47.1 billion, followed by professional services which generated N44.0 billion from July to September.
The commercial and trading sector generated N21.2 billion, pharmaceutical, soaps and toiletries raked in N386.2 million for the government while the textile and garment industry contributed N346.3 million.
Business Post gathered that the mining sector generated the least with N64.5 million.
The statistics body noted that out of the total amount generated in Q3 2020, N214.7 billion was generated as Non-Import VAT locally, while N115.34 billion was generated as Non-Import VAT for foreign input.
The balance of N94.7 billion was generated through the Nigeria Customs Service-Import VAT.
VAT is a consumption tax which is administered by the Federal Inland Revenue Service (FIRS). The Q3 data was provided by the service and verified and validated by NBS.
It was introduced in Nigeria with the enactment of VAT Act No. 102 of 1993, which replaced the sales tax, which had been in operation since 1986 by virtue of the Federal Government Decree No. 7 of 1986.
Earlier this year, the FG reviewed VAT to 7.5 per cent from 5 per cent after President Muhammadu Buhari signed the Finance Act 2020 into law, formerly known as the Finance Bill 2019.
