Nigeria generated N563.72 billion as Value Added Tax (VAT) revenue in the fourth quarter (Q4) of 2021, bringing the total VAT revenue for the year to N2.07 trillion.
This was revealed in the latest Sectoral Distribution of VAT report released by the National Bureau of Statistics (NBS).
VAT is a tax paid on the consumption of goods and services rendered.
The Q4 Sectoral VAT report by NBS shows that remittance from VAT in the last quarter of 2021 increased by 12.63% over the N500.49 billion recorded in Q3.
The revenue from VAT in Q4 was also the highest in the year under review, while the lowest was in Q1; the sum of N496.39 billion was generated.
Further analysis shows that the 2021 revenue increased by 35.38% compared to 2020. A review of last year’s data revealed that the total money generated from VAT in was N1.53 trillion and in 2021 it was N2.07 trillion.
The 2021 figure is also the highest the country has recorded since 2015.
In 2015, the total remittance from VAT was N0.76 trillion. The figure increased every year to N2.07 trillion in 2021. This represents 172.95% from 2015 to 2021.
A review of the VAT revenue target set by the government in the 2021 budget showed that the country surpassed its VAT revenue target. In the 2021 budget, the government puts the target at N1.84 trillion but generated a total of N2.07 trillion, an excess of N235.86 billion.
An increase in VAT revenue that surpassed the budget target is a good development especially now that the government needs more revenue to fund its fiscals.
Nevertheless, the government would need to increase efforts to innovate ways to expand the country’s revenue given its increasing debt profile which stood at N39.56 trillion at the end of the 2021 fiscal year.
Top Sectors that Contributed the Largest Share of Revenue in Q4 2021
The Sectoral VAT report for Q4 shows that the manufacturing sector recorded the highest VAT remittances, with a total of N102.9 billion VAT.
This was followed by the information and communication and mining and quarrying sectors. They contributed N62.4 billion and N33 billion, respectively.
Meanwhile, in Q3, manufacturing; information and communications; mining and quarrying, public administration and defence, and financial and insurance activities also made up Nigeria’s top biggest VAT sources.