Business is booming.

FG generates N424.71bn VAT in Q3 2020-NBS

The National Bureau of Statistics (NBS), says the Federal Government generated N424.71 billion as Value Added Tax (VAT) in the third quarter (Q3) of the year as against N327.2 billion generated in the second quarter (Q2).

NBS made this known in its “Sectoral Distribution of Value Added Tax Data for Q3 2020”, released on Monday in Abuja.

The report said that N275.12 billion was generated in Q3 2019, adding that the 2020 figure represents 29.80 per cent increase Quarter-on-Quarter and 54.37 per cent increase Year-on-Year.

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It said that manufacturing generated the highest amount of VAT with N47.07 billion, closely followed by professional services generating N44.01 billion.

It said that commercial and trading generated N21.18 billion, while mining generated the least with N64.50 million, closely followed by textile and garment industry with N346.27 million and pharmaceutical, soaps and toiletries, which had N386.16 million.

“Out of the total amounted generated in Q3 2020, N214.66 billion was generated as Non-Import VAT locally, while N115.34 billion was generated as Non-Import VAT for foreign.

The report said the balance of N94.70 billion was generated as Nigeria Customs Service-Import VAT.

A source reports that VAT is a consumption tax which is administered by the Federal Inland Revenue Service (FIRS).

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.

VAT used to be five per cent, however, on Jan. 13, it was reviewed to 7.5 per cent after President Muhammadu Buhari signed the Finance Act 2020 into law, formerly known as the Finance Bill 2019.

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