VAT Surge: Nigeria’s Revenue Hits N1.56 Trillion in Q2 2024, Up 9%
In a significant boost to Nigeria’s revenue generation, the federal government collected a total of N1.56 trillion from Value Added Tax (VAT) in the second quarter of 2024, marking a 9.11% increase compared to the N1.43 trillion recorded in Q1 2024. This upward trajectory underscores the government’s continued efforts to bolster its tax revenue base amidst ongoing economic challenges.
The data, released by the National Bureau of Statistics (NBS), highlights the various streams contributing to this growth. Local VAT payments led the charge with a robust N792.58 billion, while foreign VAT payments amounted to N395.74 billion. Additionally, import VAT contributed a notable N372.95 billion to the total revenue in Q2 2024.
Delving deeper into the sectoral performance, the report revealed that on a quarter-on-quarter basis, the human health and social work activities sector experienced the most significant growth, skyrocketing by 98.44%. This was followed by the agriculture, forestry, and fishing sector, which grew by an impressive 70.26%. The water supply, sewerage, waste management, and remediation activities sector also saw substantial growth, posting a 59.75% increase.
However, not all sectors experienced such positive momentum. Activities of households as employers, undifferentiated goods and services-producing activities for household use recorded the lowest growth rate at 46.84%. Real estate activities followed closely, with a 42.59% increase, reflecting a more modest performance in these areas.
In terms of sectoral contributions to the overall VAT revenue, the manufacturing sector led the pack with an 11.78% share, underscoring its critical role in driving Nigeria’s economic growth. The information and communication sector followed with a 9.02% contribution, while mining and quarrying accounted for 8.79%.
On the other end of the spectrum, the activities of households as employers, undifferentiated goods- and services-producing activities for own use had the least impact, contributing a negligible 0.00%. Other low performers included the activities of extraterritorial organizations and bodies with a 0.01% share, and water supply, sewerage, waste management, and remediation activities, along with real estate services, each contributing just 0.04%.
Year-on-year, VAT collections in Q2 2024 surged by an astonishing 99.82% compared to Q2 2023, highlighting the effectiveness of the government’s tax collection efforts and the resilience of Nigeria’s economy despite global economic headwinds.
This surge in VAT revenue not only signals a growing economy but also reflects the government’s intensified efforts to improve tax compliance and broaden the tax base. As Nigeria continues to diversify its economy and strengthen its fiscal policies, the upward trend in VAT collection is expected to play a crucial role in funding the nation’s developmental goals and addressing fiscal deficits.
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