Nigeria records over N1trn VAT receipt in H1 of 2021, highest under Buhari

In the first half of 2021, Nigeria generated over N1 trillion in Value Added Tax (VAT), the highest amount in nine years, delivering a significant boost to the non-oil revenue strategy of the present administration.

This is according to data obtained from the National Bureau of Statistics (NBS) latest VAT report released on Tuesday and analyzed by Ripples Nigeria.

H1, 2021 VAT paid represents a 322.31 percent increase from the N238.3 billion generated in 2013 and also represents a 54.7 percent, an increase from the N651.7 billion generated in 2020.

VAT is a tax placed on the price of a product or service at each stage of manufacture, distribution, or sale to the final customer.

Breakdown of the first half result shows N512.25 billion was generated in Q2 2021, compared to N496.39 billion in Q1 2021. This translates to a 3.20 percent quarterly increase.

Sectorial breakdown, showed the Manufacturing sector generated the highest amount of VAT of N94.2 billion within the period.

This was followed by Professional Services generating N71.8 billion.

Read also: Buhari is Nigeria’s highest risk at this time –Ezekwesili

State ministries & parastatals came in third with N45.3 billion while commercial and trading generated N44.7 billion.

Transport and Haulage Services completed the top five sectors that generated the most VAT in the first half of the year.

In the face of falling oil revenues, the Federal Government of Nigeria has made no secret of its intention to increase tax revenue by enacting a number of policies.

On January 13, 2020, the Finance Act bill was passed into law, increasing the VAT rate from 5% to 7.5%.

This decision has made a significant impact, but not yet enough to stop the accumulation of debt, it appears.

Except for 2016, VAT receipts have consistently increased since the commencement of Buhari’s government.

Nigeria boosted its VAT collection to N387.7 billion in 2015, up from an average of around 200 billion in the previous government’s first half of the year.

In the first half of 2016, a total of N373.4 billion in VAT income was generated, rising to N457.6 billion in 2017.

In 2018, the number increased to N536.5 billion, and in 2019, it increased to N600.9 billion.

As previously stated, N651.7 billion was generated last year.

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