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The National Bureau of Statistics (NBS) has said the federal government recorded a reported revenue of N1.56 trillion from Value Added Tax (VAT) for Q2 2024, showing a growth rate of 9.11 percent on a quarter-on-quarter basis from N1.43 trillion in Q1 2024.
This is as the minister of finance and coordinating minister of the economy, Wale Edun, on Monday, debunked reports doing the rounds that the rate for Value-Added Tax (VAT) has been upwardly adjusted to 10 per cent from 7.5 per cent.
Nigeria has a 7.5 per cent VAT on goods and services, an amount some experts and government officials say was among the lowest among the country’s peers.
The minister, in a statement signed by him, affirmed that the VAT rate as contained in relevant tax laws and chargeable on goods and services remains 7.5 per cent.
“The current VAT rate is 7.5 per cent and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the federal government nor any of its agencies will act contrary to what our laws stipulate.
“The tax system stands on a tripod, namely tax policy, tax laws and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of the government.
“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses flourish.
“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that the government is out to make life difficult for Nigerians. That is not correct. If anything, the federal government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.
“In fact, it is on record that the federal government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.
“For emphasis, as of today, VAT remains 7.5 per cent and that is what will be charged on all the goods and services that are VAT-able,” Edun said.
Meanwhile, local payments recorded were N792.58 billion, Foreign VAT Payments were N395.74 billion, while import VAT contributed N372.95 billion in Q2 2024.
Latest data from the statistics bureau showed that on a quarter-on-quarter basis, human health and social work activities recorded the highest growth rate with 98.44 per cent, followed by agriculture, forestry and fishing with 70.26 per cent, and water supply, sewerage, waste management and remediation activities with 59.75 per cent.
On the other hand, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate with –46.84 per cent, followed by Real estate activities with –42.59 per cent.
In terms of sectoral contributions, the top three largest shares in Q2 2024 were manufacturing with 11.78 per cent; information and communication with 9.02 per cent; and Mining and quarrying with 8.79 per cent.
Nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00 per cent, followed by activities of extraterritorial organisations and bodies with 0.01 per cent; and Water supply, sewerage, waste management and remediation activities with and real estate services 0.04 per cent each. However, on a year-on-year basis, VAT collections in Q2 2024 increased by 99.82 per cent from Q2 2023.
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