Finance

Manufacturers pay N118bn VAT in 3 months

Despite the harsh operating environment in the country and rising cost of operation, the manufacturing sector in the second quarter of 2022 contributed N118.8 billion representing 19.8 per cent of the total Value Added Tax (VAT) of N600.15 billion that was collected in the three months period.

Data from the National bureau of Statistics show that VAT grew slightly by 1.96 per cent quarter-on-quarter from N588.59 billion recorded in the first quarter of 2022. Total local non import VAT stood at N359.12 billion compared to N344.04 billion recorded in the first three months of the year.

Of this figure, manufacturing companies contributed 33.1 per cent with the N118.8 billion that was realised. Also, Information and Communication companies jointly put in N68.17 billion accounting for 18.98 per cent and 11.35 per cent of the local non import VAT and total VAT collected respectively.

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The VAT realised from the manufacturing sector shows a 5.1 increase over N112.97 billion that was realised in the first three months of the year, bringing total manufacturing VAT in the first half to N231.77 billion.

The N68.17 billion VAT realised from the Information and Communication sector in the second quarter of the year was a 15.8 per cent improvement over N58.84 billion that was realised from the sector in the first quarter of the year. In total, the sector’s contribution to VAT in the first half of the year stood at N127.02 billion.
Financial and Insurance activities however did not yield as much VAT in the second quarter as there as a decline of 23 per cent compared to what was realised in the first quarter of the year. NBS data showed that N22.34 billion in VAT had been realised form the sector as against N29.27 billion that was realised in the first three months of the year.
form Financial and Insurance activities in the six months period stood at N51.55 billion.
VAT realised form Mining and Quarrying activities also declined form N40.76 billion in the first three months of the year to N38.08 billion in the second quarter bringing the six months VAT figure of the sector to N78.84 billion.
The Q2 VAT data by the NBS showed that on a quarter-on-quarter basis, Electricity, gas, steam and air conditioning supply recorded the highest growth rate with 116.47 per cent, followed by Accommodation and food service activities with 42.44 per cent.
On the other hand, Activities of extraterritorial organizations and bodies had the lowest growth rate with –42.39 per cent, followed by Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use with –36.57 per cent.
Conversely, Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.03 per cent, followed by Activities of extraterritorial organisations and bodies with 0.05 per cent; and Water supply, sewerage, waste management and remediation activities with 0.13 per cent. However, on a year-on-year basis, VAT collections in Q2 2022 increased by 17.16 per cent from Q2 2022.

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