The National Bureau of Statistics (NBS) has revealed that N424.71 billion was generated as Value Added Tax (VAT) in the third quarter (Q3) 2020 as against N327.20billion generated in Q2 2020.
In a sectoral distribution of VAT data for Q3 2020 released, on Monday, the NBS stated that N275.12billion was generated in Q3 2019 representing 29.80 increase Quarter-on-Quarter and 54.37per cent increase Year-on-Year respectively.
“Other Manufacturing generated the highest amount of VAT with N47.07billion generated and closely followed by Professional Services generating N44.01billion, Commercial and Trading generating N21.18billion while Mining generated the least and closely followed by Textile and Garment Industry and Pharmaceutical, Soaps & Toiletries with N64.50mllion, N346.27million and N386.16 million generated respectively,” the report read in part.
According to the NBS, out of the total amount generated in Q3 2020, N214.66billion was generated as Non-Import VAT locally while N115.34billion was generated as Non-Import VAT for foreign. The balance of N94.70billion it noted, was generated as Nigerian Custom Service NCS-Import VAT.
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VAT is a form of tax or levy imposed by the Federal Government on the purchase and consumption of goods and services in Nigeria. It is a tax that is charged on the value which a citizen derives from the purchase of goods and services as against a tax that is charged on the income of a citizen. It can also be said to be a tax on spending or consumption levied at every stage of transaction but eventually borne by the final consumer of such goods and services.
The legal regime regulating the control, imposition and regulation of VAT on goods and services in Nigeria is the Value Added Tax Act (VAT Act) and the Finance Act (the Act).
By section 7 of the VAT Act, the Federal Inland Revenue Service (FIRS) is the body charged with the administration, management and collection of VAT in Nigeria. The current rate of VAT in Nigeria is 7.5 per cent of the total value of the goods or services purchased.
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