Nigeria’s Impressive Increase in Value Added Tax Collection for Q3
The National Bureau of Statistics has released a report indicating that Nigeria’s total Value Added Tax (VAT) collection for the third quarter of 2023 amounted to N948.07 billion, representing a substantial 21.34 percent increase from the N781.35 billion recorded in the previous quarter. This surge in revenue signifies a significant rise in the country’s economic activity.
The breakdown of the VAT collection indicates that domestic payments accounted for N522.08 billion, while foreign VAT payments totalled N204.58 billion. Import VAT also made a substantial contribution of N221.41 billion. In terms of sectoral contributions, the manufacturing sector led with 26.51 percent, followed by information and communication at 19.04 percent, and financial & insurance activities at 12.31 percent.
Agriculture, forestry, and fishing experienced the highest growth rate at 91.87 percent, while real estate and construction saw negative growth rates of –37.68 percent and –9.54 percent, respectively. Despite the overall positive growth, it is imperative to address the challenges faced by certain sectors to ensure balanced economic development.
The report also revealed an impressive 51.60 percent increase in year-on-year VAT collections for Q3 2023 compared to the same period in 2022, reflecting sustained economic progress. This positive trend underscores the resilience of Nigeria’s economy amid global uncertainties.
In addition to VAT, the report also disclosed a noteworthy aggregate Company Income Tax (CIT) of N1.75 trillion for Q3 2023, reflecting a 14.27 percent increase from Q2 2023. This growth reaffirms the stability and growth potential of Nigeria’s tax revenue.
Significant growth rates in CIT collection were observed in the education and public administration and defence sectors, highlighting the diverse contributions to the country’s tax revenue. Conversely, activities of households as employers and certain service-related sectors faced challenges in CIT collection, pointing to areas that may require policy support for improvement.
It is evident that Nigeria’s tax collection is making significant strides, which bodes well for the country’s economic development and stability. The effective management and allocation of these tax revenues will be crucial in addressing various socio-economic needs and fostering inclusive growth.
The positive trajectory of VAT and CIT collections is a testament to Nigeria’s economic resilience and potential. However, it is important for policymakers and stakeholders to address the challenges faced by certain sectors and ensure a balanced and sustainable tax system.
As Nigeria continues to strengthen its position in the global economy, the effective utilization of tax revenues will be instrumental in driving progress and prosperity for all its citizens.
