Nigeria’s VAT Earnings Hit N948.07bn In 3Q

• Construction, Real Estate sectors facing challenging times

BY CHINYERE OBIORA, LAGOS – Despite the domestic economic storms, Nigeria’s earnings through the Value Added Tax (VAT) recorded significant growth in the third quarter of 2023 with the aggregate amount surging to N948.07 billion for the period.

The figures showed a surge of over 21.34 percent on a quarter-on-quarter basis, compared to N781.35 billion recorded in the second quarter of this year.

The latest data from the National Bureau of Statistics (NBS) provide a comprehensive overview of VAT contributions across sectors and illuminates notable trends in economic activities with reports indicating that the agriculture, forestry, and fishing sectors recorded the highest growth with an impressive rise of 91.87 percent on a quarter-on-quarter basis.

Also, the activities of extra-territorial organisations and bodies following these sectors closely exhibited substantial growth, recording an 80.25 percent increase.

However, on the laggard side is the real estate sector currently facing challenges and showing the lowest growth rate of  -37.68 percent. Another industry also experiencing contraction is Construction which has a worrying growth rate of -9.54 percent.

Further breakdown of contributions by payment categories indicated that local payments accounted for N522.08 billion, foreign VAT payments stood at N204.58 billion, and import VAT stood at N221.41 billion.

On sectoral contributions, Manufacturing led the pack with a substantial increase of 26.51 percent; Information and Communication secured a significant contribution, accounting for 19.04 percent. Similarly, financial and insurance activities maintained a strong presence with a share of 12.31 percent.

However, recording the least share with 0.02 percent are activities of households as employers and undifferentiated goods-and services-producing activities of households for Their Own Use continue to battle the harsh economic conditions in the country.

Not faring better are the Water Supply, Sewerage, Waste management, and Remediation activities which contributed 0.06 percent while activities of extraterritorial organisations and bodies registered a 0.10 percent share.

On the year-on-year growth, VAT collections in the third quarter of 2023 exhibited an impressive year-on-year increase of 51.60 percent, reflecting a positive trend from Q3 2022.

The Q3 2023 VAT report underscores the resilience of certain sectors, highlights areas for potential improvement, and provides valuable insights for businesses and policymakers navigating the dynamic economic landscape.