Government earns N289b from VAT in Q1, loses by three per cent
The N8.97 billion VAT shortfall, compared with the previous quarter’s numbers, were part of the more than N300 billion deficit in revenue projection of the government in the first quarter of 2019.
The development shows the level of uncertainty associated with the country’s revenue projections, especially in the areas of tax that is beset by leakages, evasion and challenges of informal activities.
Although majority of the sectors in the VAT classifications recorded significant increases in collections, it was not enough to cover losses from 11 major sectors that caused the decline.
The declining sectors are commercial and trading, seven per cent; conglomerates, 8.3 per cent; gas, 5.5 per cent; hotels and catering, 10.8 per cent; offshore operations, 20.8 per cent; and oil producing, 43 per cent.
Others are petro-chemical and petroleum refineries, 17 per cent; pharmaceutical, soaps and toileteries, 3.7 per cent; properties and investments, 8.7 per cent; state ministries and parastatals, 37 per cent; and textile and garment industry, 16.2 per cent.
According to the data released by the National Bureau of Statistics (NBS), yesterday, despite the failings of these sectors, they also emerged top of the list of major VAT collectors.
Other manufacturing generated the highest amount of VAT with N31.42 billion, closely followed by Professional Services, which generated N24.31 billion, representing nine per cent and one per cent increases, respectively.
Commercial and Trading generated N14.92 billion, falling from N16.12 billion in the fourth quarter of 2018, while Mining generated the least and closely followed by Pharmaceutical, Soaps & Toiletries and Textile and Garment Industry with N59.88 million, N201.58 million and N298.14 million respectively.
Among the top 15 of the sectors that collected huge VAT revenue in the period under review were Breweries, Bottling and Beverages, N10.84 billion, representing an increase of 10.7 per cent quarter-on-quarter; Oil Producing, N8.5 billion, though declined by 43 per cent; State Ministries and Parastatals, N8.05 billion; and Federal Ministries and Parastatals, N7.94 billion.
Others were Banks and Financial Institutions, N4.2 billion, rising by 6.5 per cent quarter-on-quarter; Pioneering, N3.5 billion, with a 119 per cent increase, quarter-on-quarter; Building and Construction, N2.74 billion; Transport and Haulage Services, N2.4 billion; Oil Marketing, N2.34 billion; Stevedoring, Clearing and Forwarding, N1.7 billion; Hotels and Catering, N1.62 billion; and Gas, N1.53 billion.
Out of the total amount generated in Q1 2019, N137.06bn was generated as Non-Import VAT locally while N98.97bn was generated as Non-Import VAT for foreign. The balance of N5.01bn was generated as NCS-Import VAT.