The latest report on value-added-tax (VAT) from the National Bureau of Statistics (NBS) shows that the federation’s gross collections from VAT increased by 24.9% y/y and 4.2% q/q to NGN625.4bn in Q3 ’22. According to the Bureau’s data, domestic VAT collections, which accounted for c.58.9% of total VAT revenue during the quarter, increased slightly by 2% q/q to NGN368bn. The NBS data series is compiled from data provided by the Federal Inland Revenue Service (FIRS).  

Non-import foreign VAT grew by 10% q/q to NGN122bn, while import VAT generated by the Nigerian Customs Service increased by 4% q/q to NGN136bn. Both VAT sources accounted for c.19% and c.22% of total VAT collections respectively.

With respect to sectoral VAT collections, the manufacturing sector retained its position as the largest contributor to VAT revenue, generating over NGN114bn. However, it was down 4% q/q, relative to the previous quarter.

The information and communication sector came second in the league of sectoral contributors. The sector contributed over NGN68bn in revenue and accounted for c.19% and c.11% of domestic VAT and total VAT collections respectively.

Approximately 6% of total VAT revenue and 11% of domestic VAT were generated by mining and quarrying, which was the third largest contributor to VAT revenue.

The Federal Inland Revenue Service (FIRS) recently appointed telecommunication operators, MTN Nigeria, and Airtel Nigeria, as well as deposit money banks, license to charge and deduct value-added-tax on all taxable supplies made to them. This new policy is expected to take effect from January 1, 2023.

The government’s new initiative is aimed at expanding the tax base, as it continues to look for ways to boost non-oil revenue

In aggregate terms, gross VAT collections totalled NGN1.8trn over 9M ’22, representing an increase of c.20% compared with NGN1.5trn in 9M ’21.