The National Bureau of Statistics (NBS) on Monday said that a total of N4.77tn was realized from Value Added Tax (VAT) on local, foreign, and imported goods and services within the first nine months of this year.
The figure is contained in the VAT sectoral report which was released by the NBS on Monday.
A breakdown of the N4.77tn showed that the sum of N1.43tn was realized in the first quarter of this year.
This rose by N130bn in the second quarter of this year to N1.56tn before hitting the N1.78tn generated in the third quarter of this year.
The N1.78tn generated in the third quarter represents 37.32 per cent of the total N4.77tn realized during the entire nine months period.
On a year-on-year quarterly basis, the VAT increased by 88 per cent compared to the N948bn generated in Q3 2023.
A breakdown of the report revealed that “Local payments recorded were N922.87bn, Foreign VAT Payments were N448.85bn, while import VAT contributed N410.62bn in Q3 2024.
“On a quarter-on-quarter basis, Human health and social work activities recorded the highest growth rate with 250.39 per cent, followed by the Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use with 102.09 per cent.
“On the other hand, Water supply, sewerage, waste management and remediation activities had the least growth rate with –41.92 per cent, followed by Activities of extraterritorial organizations and bodies with –36.14 per cent.”
By sectoral contributions, the statistics hub said the manufacturing industry contributed 22.21 per cent, information and communication by 20.89 per cent, and mining and quarrying activities generated 18.90 per cent of the total sum recorded in Q3, 2024.
The drive for tax compliance has been intensified following the introduction of a series of tax reform bills by the federal government.
In a renewed bid to increase non-oil revenue, it was gathered, had reported that the Federal Capital Territory Internal Revenue Service (FCT-IRS) has identified and written to 10,000 high-net-worth individuals within the territory regarding tax compliance.
These individuals, whose annual earnings reportedly amount to trillions of naira collectively, are now under heightened scrutiny as part of the government’s broader plan to optimize its tax revenue streams.
These reforms aim to close loopholes, increase transparency, and expand the tax net. However, they have not been without controversy.
Critics have argued that some of the measures, such as increased rates on personal and corporate income tax, may disproportionately burden businesses and middle-income earners, while others question whether the government can effectively manage and deploy the increased revenue.
Supporters of the reforms, however, view them as a critical step toward achieving fiscal sustainability.
Nigeria’s tax-to-GDP ratio, currently among the lowest in the world, leaves significant room for improvement.
By focusing on high-income earners, the government hopes to address longstanding inequities in the tax system, ensuring that those with the greatest capacity to pay contribute their fair share.
The initiative to target wealthy residents, though laudable, presents its own set of challenges. Historically, high-net-worth individuals in Nigeria have been adept at exploiting tax avoidance strategies, including the use of offshore accounts and complex financial structures.
The establishment of the new monitoring unit is expected to address these issues, but its effectiveness will depend on the resources and expertise made available to it.
Additionally, there are concerns about potential pushback from influential figures within the target group.
SOURCE: The Whistler