Tax Revenue Rises 30% To N2.85trn
Revenue into the Federation Account from Value Added Tax, VAT, and Company Income Tax, CIT, rose by 30.1 per cent, year-on-year, YoY, to N2.85 trillion in nine months ended September 30th, 2021 (9mths-21) from N2.19 trillion in the corresponding period of last year (9mths-2020).
Findings in the VAT and CIT data for Q3 ‘2021 released by the National Bureau of Statistics, NBS, over the weekend showed that VAT recorded stronger growth at 40 per cent as against the 20 per cent growth recorded in CIT during the 9mths-21 period.
While the total VAT collections rose to N1.51 trillion in 9mths-21 from N1.08 trillion in the corresponding period of last year (9mths-2020), indicating 40 per cent increase, the CIT revenue rose to N1.34 trillion in the 9mths-21 from N1.11 trillion in 9mths-2020, indicating 20 per cent increase.
Reviewing the VAT revenue collected in the first three quarters of 2021, the NBS said: “The total Value Added Tax (VAT) collected over the first, second and third quarters 2021 were reported at N496.39 billion, N512.25 billion and N500.49 billion respectively compared to the corresponding figures of last year at N324.58 billion, N327.20 billion and N424.71 billion respectively.
“This shows higher revenue in the first three quarters of 2021, revealing an improvement in collections. On a year-on-year basis, this upsurge shows growth rates of 52.93% in Q1 2021, 56.56% in Q2 2021 and 17.84% in Q3 2021.”
Looking at the sectoral distribution of local revenue generated over the period, collections from the Other Manufacturing activity; Professional Services activity; and State Ministries & Parastatals accounted for the top three largest share of revenue in Q1 2021 with N49.41billion (21.97%), N42.50 billion (18.90%), and N26.96 billion (11.99%) respectively.
“Nevertheless, Non-Import VAT local was N224.85 billion, Non-Import (foreign) VAT amounted to N171.66 billion, while NCS-Import VAT stood at N99.88 billion.
“Similarly, the Other Manufacturing activity; Professional Services activity; and Commercial and Trading activity accounted for the top largest collections in Q2 2021 with N44.89 billion (23.95%), N29.30 billon (15.63%) and N21.96 billion (11.71%) respectively.
“In second quarter 2021, Non-Import VAT local was N187.43 billion, lower than the first quarter 2021, Non- Import (foreign) VAT was N207.69 billion, higher than first quarter 2021, while NCS-Import VAT stood at N117.13 billion, an improvement from first quarter 2021.
On the CIT revenue collected in the first three quarters of 2021, the NBS stated: “First and second quarter 2021 Company Income Tax (CIT) collections were N392.65 billion and N472.07 billion respectively, higher than the corresponding quarters of last year.
“By third quarter 2021, this has increased to N472.52 billion, yet higher than Q3 of the previous year. In terms of sectoral distribution, Breweries, Bottling and Beverages activity; Professional Services activity; and State Ministries & Parastatals accounted for the top three largest share in Q1 2021 with N23.26 billion (15.27%), N18.17 billion (11.93%) and N17.35 billion (11.39%) respectively. Overall, Local collections stood at N152.33 billion, Other payments amounted to N55.85 billion, while Foreign CIT Payment was N184.47 billion.
“In second quarter 2021, activity of Professional Services; Other manufacturing; and Banks & Financial Institutions stood top three collections with N130.09 billion (31.14%), N87.27 billion (20.89%) and N60.01 billion (14.36%) respectively. Of the aggregate, Local recorded N417.74 billion, Other Payments was N2.72billion and Foreign CIT Payment contributed N51.61 billion. Third quarter 2021 recorded Manufacturing activity (N64.48 billion); Information and Communication activity (N58.15 billion); and Mining & Quarrying activity (N36.01 billion) as the top three largest share of revenue at 22.08%, 19.91% and 12.33% respectively.”