Manufacturing sector tops as Nigeria generates N625.4 billion VAT in Q3 2022

December 21, 2022December 21, 2022 Springnewsng Media Group Business

December 21,2022

The Federal Government of Nigeria (FGN) through the Federal Inland Revenue Service (FIRS) generated a sum of N625.39 billion as value-added tax in the third quarter of 2022.

This is contained in the recently released sectoral VAT report by the National Bureau of Statistics (NBS) as seen by Nairametrics.

According to the report, VAT revenue increased by 24.9% year-on-year compared to N500.49 billion generated in the corresponding period of 2021. Compared to the previous quarter (Q2 2022: N600.15 billion), it increased by 4.21%.

Key takeaways from the report: The manufacturing sector remained top on the list of sectors with the highest VAT remittance in the quarter under review with N114.37 billion remitted, accounting for 18.29%, followed by the information and communication sector with N68.16 billion.

Further breakdown of the report showed that a sum of N367.93 billion was generated as total non-import local VAT, which increased by 24.5% year-on-year from N295.5 billion recorded in the comparable period of 2021.
Also, total foreign non-import VAT stood at N121.65 billion, an increase from N81.26 billion and N111.13 billion recorded in Q3 2021 and Q2 2022 respectively. Meanwhile, Nigeria Customs Service, NCS-import VAT was N135.61 billion in the quarter under review. It increased by 9.57% ad 4.4% from N123.8 billion and N129.9 billion remitted in Q3 2021 and Q2 2022 respectively.
A cursory look at the sectoral distribution showed that the activities of extraterritorial organizations recorded the highest improvement in terms of year-on-year percentage change, with over 1,000% growth from N20.16 million in Q3 2021 to N238.93 million in the period under review.
On the flip side, the activities of households recorded the highest decline in the review period, dropping from N90.83 billion recorded in Q3 2021 to N42.66 billion in Q3 2022. Meanwhile, on a year-to-date basis, VAT revenue stood at N1.81 trillion (between January and September 2022) compared to N1.51 trillion recorded in the same period last year.

Below is the list of top sectors with the highest VAT remittance in the third quarter of 2022

Manufacturing –N114.37 billion: The manufacturing sector, which comprises consumer goods and industrial goods companies remitted a sum of N114.37 billion to the Federal Inland Revenue Service as VAT payment for the third quarter of 2022, which accounts for 18.29% of the total VAT generated in the period.

The manufacturing sector plays host to some of the biggest companies in the Nigerian economy, from the likes of Dangote, BUA, and Nestle amongst others who rake in billions in quarterly net profit. The VAT remittance of the sector increased by 25.4% compared to the N91.2 billion paid in the corresponding period of 2021.
On the other hand, VAT paid by the manufacturing sector on a quarter-on-quarter basis, declined by 3.73% from N118.8 billion recorded in the previous sector.

ICT –N68.16 billion: The information and communication sector paid a sum of N68.16 billion as VAT in Q3 2022, representing 10.9% of the total VAT revenue generated by the federal government in the period under review.

The ICT sector also comprises some of the biggest companies in the country, especially the telecommunication service providers like MTN, Airtel, Glo, and 9mobile amongst other fibre and cable providers.
On a year-on-year comparison, VAT remittance of the ICT sector increased by 15.04% compared to N59.25 billion remitted in the corresponding period of 2021, while it declined marginally by 0.03% when compared to the N68.18 billion paid in the previous quarter.

Mining and quarrying –N40.29 billion: A sum of N40.29 billion was remitted by the mining and quarrying sector of the Nigerian economy as value-added taxes in the third quarter of the year, accounting for 6.44% of the total VAT payments.

VAT payments by the mining and quarrying sector jumped by 41.66% on a year-on-year basis compared to N28.44 billion paid in Q3 2021. It also increased by 5.97% in comparison to N38.08 billion recorded in the previous quarter