The latest quarterly report on value-added-tax (VAT) from the National Bureau of Statistics (NBS) shows that the federation’s gross collections from VAT increased by 12% q/q and 24% y/y to NGN697.4bn in Q4 ‘22. On an aggregate basis, gross VAT collections totalled NGN2.5trn in 2022, implying an increase of 21% y/y compared with NGN2.1trn realised in 2021. Domestic VAT collections were the highest source of revenue and accounted for c.59% of total VAT collections during the quarter. It generated over NGN408bn in Q4 ’22, representing an increase of 22% y/y and 11% q/q. The NBS data series is compiled from data provided by the Federal Inland Revenue Service (FIRS).

Non-import (foreign) VAT and import VAT collections by the Nigerian Customs Service were the second and third largest sources of revenue, accounting for 23% and 19% of total VAT collections respectively. Both VAT sources generated over NGN159bn and NGN129bn during the period.

Amongst the sectors, manufacturing topped the list with total VAT collection of over NGN131bn, and contributed about 32% and c.19% of domestic VAT and total VAT collections respectively.

According to the Bureau’s data, VAT revenue from the sector grew by +15% q/q, much better than the -4% q/q in the previous quarter.

The manufacturing sector GDP delivered a growth rate of 2.8% y/y in Q4 ’22, rebounding from a -1.9% contraction in Q3 ‘22.

The information and communication sector was the second largest contributor to VAT revenue, generating over NGN73bn in revenue and accounting for 18% and 11% of domestic and total VAT collections respectively.

Public administration and defence came in third at around c.6%, or c.10% on a sector wide basis. The revenue by the sector amounted to NGN40bn in Q4 ’22.

The improved revenue outturn from VAT collections can be linked to the government’s various initiatives aimed at raising revenue from non-oil sources.