Nigeria's VAT grows by 1.96% in Q2 2022

By: Damian Okonkwo

Nigeria has witnessed an increase in its Value Added Tax (VAT) which rose to N600.15 billion in Q2 2022, marking a 1.96% growth QoQ when compared to the N588.59 billion recorded in Q1 2022. The VAT growth on a Year-over-Year basis rose to 17.16% in Q2 2022.

According to the details released by the National Bureau of Statistics (NBS) on Saturday, the VAT realized from local payments rose to N359.12 billion while those realized from foreign VAT was N111.13 billion.

Further, the report revealed that the most significant growth came from electricity, steam, gas, and air-conditioners supply which grew by 116.47%.

Also, closely following this is the food services and accommodation which rose by 42.44%.

Nonetheless, the lowest record came from extraterrestrial organizations s which recorded a 42.39% growth. Following this is the undifferentiated household goods and services which grew by 36.57%.

The VAT growth from agriculture, forestry, and fishing rose to N1.05 billion, marking a total of 26.5% growth when compared to the N827.58 million recorded in Q1 2022.

Moreover, concerning different sectors' contributions, the report showed that more shareholders were found in the Manufacturing sector which yielded 33.08%, and followed by the ICT sector which yielded 18.98%. Mining and quarrying yielded only 10.60%.

Above all, notwithstanding the current improvement recorded in the VAT growth in Q2 2022, previous findings have portrayed that the VAT has not contributed significantly towards economic growth especially as seen in the GDP. Economists would rather consider VAT as having a negative relationship with per capital income while having a positive impact on the total government revenue.