Dropping compliance collapses Value Added Tax revenue to N204.77bn in Q1
Latest report from the National Bureau of Statistics (NBS) released on Tuesday has shown a trending drop in the total revenue generated by the country from Value Added Tax (VAT). The crash showed that VAT dropped from N207.35bn in the fourth quarter of 2016 to N204.77bn in the first quarter of this year.
However, within the period, manufacturing sector generated the highest amount of VAT with N28.73bn, adding that this is followed by professional services and commercial trading with N20.82bn and N12.89bn respectively.
While the report revealed that mining sector lowest in VAT collection of N35.07m, it stated that “Sectoral distribution of VAT data for Q1 2017 reflected that the sum N204.77bn was generated as VAT in Q1 2017 as against N207.35bn generated in Q4 2016 and N186.43bn in Q1 2016 representing 1.25 per cent decrease quarter-on-quarter and 9.84 per cent increase year-on-year.”
Out of the total VAT generated in the first quarter of2017, N126.64bn was generated as Non-Import VAT locally while N31.72bn was generated as Non-Import VAT for foreign. The balance of N46.41bn, the report added was generated as NCS-Import VAT.
It would be recalled that the Minister of Finance, Mrs Kemi Adeosun, had stated some time ago that the low level of non-oil revenue in the country is unacceptably low, adding that there is need for concerted efforts to improve revenue generation.
She further called for improvement in the rate of tax compliance as a means of shoring up non-oil revenue for economic development.
According to her, “Revenue mobilization is critical to the success of Nigeria’s economic reform agenda. We have an unacceptably low level of non-oil revenue, and much of that is driven by a failure to collect tax revenues.
“With a tax to GDP ratio of only six per cent, one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth.
“Our data gathering programme over the last year has now given us the tools we need to be more aggressive at pursuing tax avoiders, both domestically and abroad.
“We are going to focus on tax in 2017 through an asset an income declaration scheme to address our low tax revenue collection and ensure improved compliance, a broader tax base and more sustainable revenue. This is fundamental to delivering on our reform plans.”
Some experts who bared their minds on the dropping fortune of VAT traced the trend to the serious drop in purchasing powers of Nigerians caused by recession.
