Local payments amounted to N1.35 trillion, while foreign CIT contributions stood at N1.12 trillion for Q2 2024.

Among sectors, Agriculture, Forestry, and Fishing saw the highest growth rate at 474.50%, followed by Financial and Insurance Activities and Manufacturing with growth rates of 429.76% and 414.15%, respectively.

Conversely, Activities of Households as Employers and undifferentiated goods- and services-producing activities of households for own use experienced the lowest growth rate at –30.22%, with Activities of Extraterritorial Organizations and Bodies also declining by –15.67%.

In terms of sectoral contributions for Q2 2024, Financial and Insurance Activities led with a 15.53% share, followed by Manufacturing at 8.99% and Information and Communication at 7.84%. Activities of Households as Employers, undifferentiated goods- and services-producing activities of households for own use had the smallest share at 0.00%, with Water Supply, Sewerage, Waste Management, and Remediation Activities at 0.02%, and Activities of Extraterritorial Organizations and Bodies at 0.03%.

On a year-on-year basis, CIT collections for Q2 2024 increased by 59.52% compared to Q2 2023, which recorded N1.55 trillion.

According to the NBS report on Monday, the second quarter of 2023 alone accounted for VAT revenues amounting to N781.35 billion, signifying a remarkable quarter-on-quarter growth rate of 10.11% compared to N709.59 billion in the first quarter of the year.

Analyzing the data further, it becomes evident that local payments accounted for N512.03 billion, foreign VAT payments reached N142.63 billion, and import VAT contributed N126.69 billion in the second quarter of 2023.

The NBS highlighted that, on a quarter-on-quarter basis, the activities of extra-territorial organizations and bodies exhibited the highest growth rate, soaring by an impressive 212.06%, followed closely by real estate activities with a growth rate of 123.09%.

Conversely, activities such as households functioning as employers and undifferentiated goods- and services-producing activities of households for personal use experienced the lowest growth rate, standing at -57.06%. Agriculture, forestry, and fishing also posted a negative growth rate of -32.86%.

In terms of sectoral contributions, the top three sectors with the largest shares in the second quarter of 2023 were manufacturing, accounting for 29.64%; information and communication, contributing 21.19%; and financial and insurance activities, making up 11.18% of the total.

On the other hand, activities of households as employers and undifferentiated goods- and services-producing activities of households for personal use held the smallest share at 0.01%, followed by water supply, sewerage, waste management, and remediation activities, as well as activities of extraterritorial organizations and bodies, each accounting for 0.05%.

Minister of State for Petroleum Resources, Timipre Sylva, briefed State House correspondents after the FEC meeting presided by Vice President Yemi Osinbajo on Wednesday at the Presidential Villa, Abuja.

Sylva said the project was still at the point of the front end engineering design after which the cost would be determined.

The pipeline would traverse 15 West African countries to Morocco and Spain.

“The Ministry of Petroleum Resources presented three memos to Council.

“The first memo, Council approved for the NNPC Ltd to execute MoU with ECOWAS for the construction of the Nigeria-Morocco Gas Pipeline.

“This gas pipeline is to take gas to 15 West African countries and to Morocco and through Morocco to Spain and Europe,’’ he said.

The minister said the council also approved the construction of a switchgear room and installation of power distribution cables and equipment for the Nigeria oil and gas park in Ogbia, Bayelsa, in the sum of N3.8billion.

He said the park was to support local manufacturing of components for the oil and gas industry.

More so, Sylva said that FEC approved various contracts for the construction of an access road with bridges to the Brass Petroleum Product Deport in Inibomoyekiri in Brass Local Government in the sum of N11billion plus 7.5 per cent VAT.

This represents a 33 percent year-on-year (YoY) increase in VAT when compared with N1.55 trillion generated in 2020.

Analysis of data in its Sectoral Distribution of VAT Report for Q4’21 released today, showed that  VAT stood at N512.2 billion in Q1’21 and fell by 3.16 per cent to N496 billion in Q3’2.

In Q3’21 VAT rose by 0.88 per cent to N500.4 billion and up by 12.6 per cent to N563.7 billion in Q4’21.

The bureau stated:”On the aggregate, VAT for Q4’21 was reported at N563.72 billion, a growth of 12.63 per cent on a quarter-on-quarter (QoQ) basis from N500.49 billion in Q3’21.

“Local payments recorded were N333.29 billion in Q4’21, while Foreign VAT Payment contributed N103.52 billion.

“On a QoQ basis, the activities of extraterritorial organizations and bodies recorded the highest growth rate with 150.16 per cent, followed by agriculture, forestry and fishing with 92.48 per cent . “On the other hand, arts, entertainment and recreation had the lowest growth rate with -7.07 per cent, followed by education with -5.69 per cent.

“In terms of sectoral contributions, the top three largest shares in Q4’21 were manufacturing with 30.86 per cent; information and communication with 18.72 per cent and mining and quarrying with 9.91 per cent.

“Conversely, the activities of extraterritorial organizations and bodies recorded the least share with 0.02 per cent, followed by activities of households as employers, undifferentiated goods and services-producing activities of households for own use with 0.04 per cent; and water supply, sewerage, waste management and remediation activities with 0.11 per cent . “However, on a YoYbasis, VAT collections in Q4’21 increased by 23.98 per cent from Q4″20.”

He disclosed this while speaking on the disagreement over the collection of VAT between FIRS and Rivers Government in New York, NAN reports.

Malami, who is also Minister of Justice explained that the ruling of the Court of Appeal that FIRS and the Rivers Government maintain status quo, favoured FIRS.

He said that it was Federal Inland Revenue Service (FIRS) that had been collecting the VAT before the dispute arose, over which the Rivers government approached the High Court.

Malami said: “The position of not only the Federal Government but indeed the judiciary is the fact that status quo associated with the collecting of VAT should be maintained.

“And as far as the judicial system is concerned, the status quo as at the time the parties approached the court, it was the Federal Inland Revenue Service that was indeed collecting the value added tax.

“So with that in mind, the Federal Government has succeeded in obtaining an order that establishes the sustenance of the status quo, which status quo is that the Federal Inland Revenue Service should continue collection.

“This is pending the determination of the cases that were instituted by states, particularly the Rivers State Government and the Lagos State government. The cases are being determined by the court.”

The Speaker, Mudashiru Obasa, directed the acting Clerk, Olalekan Onafeko, to transmit a clean copy to Governor Babajide Sanwo-Olu for assent.

Both bills were passed after unanimous votes by the lawmakers at the sitting where they were read the third time.

The bill that prohibits open cattle grazing proposes a 21-year jail term for herders in possession of firearms and the establishment of a task force to curb open grazing of cattle.

The anti-open grazing law followed similar laws passed in Benue, Ogun, Ekiti, Ondo and other parts of the country to curb killer herdsmen activities, while the VAT bill was passed in the wake of similar legislation by Governor Nyesom Wike in Rivers State.

The Speaker, Obasa, commended his colleagues after the bills were passed.

He said: “I thank you all for this historic exercise.”

The figure is about 10 per cent higher than the N2.68 billion recorded in 2019.

The breakdown shows that the third quarter (Q3) recorded the largest performance with a total of N840.7 billion while N620 billion, the least quarterly performance, was recorded in Q1.

VAT accounted for N1.53 trillion or 52 per cent of the total figure, while N1.41 trillion was sourced from CIT.

The CIT income generated in 2020 is 13.5 per cent short of the N1.63 trillion generated from the same source in 2019.

The 2020 CIT income was distributed accordingly: local companies (N750.5 billion), foreign CIT payment (N380.8 billion), and others (N238.1 billion.

According to Guardian, professional services (including telecoms) and banks/other financial institutions led last year’s CIT revenue drive with N180.3 billion and N96.4 billion respectively. While banks and other financial institutions’ contribution to the CIT fell by about 48 per cent (compared to N142.7 billion realised from the sector in 2019), professional service improved slightly, rising from N177.7 billion generated from the sector in 2019 to N180.3 billion.

Other top contributors to CIT incomes are other manufacturing (N80.2 billion), commerce and trading (N65.6 billion), breweries, bottling and beverages (N53.2 billion), state ministries and parastatals (N49 billion), transport and haulage (N45.5 billion), oil-producing (N40.8 billion) and federal ministries and parastatals (N22.5 billion).

The laggards were the textile and garment industry (N360 million), mining (N343.2 million), local government councils (N1.1 billion), chemicals, paints and allied industries (N2 billion) and publishing, printing and packaging (N2.1 billion).

Textile and garment recorded highest year-to-date (YTD) improvement with 100 per cent jump in its CIT generation while the contribution of petrochemical and petroleum refineries fell by 45 per cent YTD to top the least improved sectors.

In the fourth quarter, the country generated N454.7 billion from VAT, making it the top-performing quarter. The first quarter was the poorest with 324.6 billion. The pattern was different from that of 2019 when the Q2 topped the year followed by the fourth and then first.

Recall that VAT was increased from five per cent to 7.5 per cent as contained in the Finance Act 2019. The increase took effect on February 1, 2020. According to sectoral analysis sourced from the NBS data, the government received N763 billion from non-import (local) VAT, N420.4 billion from non-import (foreign) VAT and N347.7 billion from the Nigeria Customs Service (NSC)-import VAT.

Professional service recorded N162.3 billion to emerge as the top contributing sector followed by other manufacturing with N154.2 VAT revenue. Mining recorded N251 million to take the least position in terms of value addition to VAT revenue.

The bill, which comprises seven bills, seeks to amend six tax provisions and make them more responsive to tax reform policies.

President Muhammadu Buhari on October 8 presented the Finance Bill to a joint session of the National Assembly for consideration and passage into law.

The president presented the bill alongside the 2020 Appropriation Bill. He proposed an increase in the Valued-Added Tax rate from five percent to 7.5 percent.

The bill also proposes to amend the Customs and Excise Tariff Act to encourage local manufacturers.

The legislation under the bill includes Companies Income Tax, Value Added Tax, Customs and Excise Tariff, Capital Gains Tax Act, Petroleum Profit Tax, Personal Income Tax, and Stamp Duties Act.

The Minister of finance, budget and national planning, Mrs Zainab Ahmed confirmed the increment at the end of the cabinet meeting. The new rate which will take effect from 2020 is however subject to an amendment of the VAT act of 1994 by the national assembly.

She said: “We also reported to council and council has agreed that we start the process towards the increase of the VAR rate. We are proposing and council has agreed increase the VAT rate from five percent to 7.2 per cent. This is important because the federal government only retains 15 per cent of the VAT, 85 per cent is actually for the states and local government and the state need additional revenue to be able to meet the obligations of the minimum wage. This process involves extensive consultations that need to be made across the country at various levels and also it will involve the review of the VAT Act. So, it is not going to be implemented immediately until the Act is reviewed. So, accordingly, following these assumptions the total revenue estimate in the sum of N7.5 trillion for the year 2020 and N2.09 trillion that will be accruing to the federation account and the VAT respectively. There will of course be the distribution to the three tiers of government based on the statutorily revenue sharing formula as defined in the constitution and to this effect, it means the Federal Government will be receiving proposed aggregate of N4.26 trillion from the federal account and the VAT pool, while the states and the local government are expected to receive N3.04 trillion and N2.27 trillion respectively. The expenditure for the year 2020 is in the total sum of N10.07 trillion. This is three percent less than the approved expenditure in the 2019 budget that has been passed into law. The total expenditure includes statutory transfers, non-debt recurrent expenditure such as salaries and pensions and also the Social Intervention Programmes (SIPs).The 2020 budget has a debt service estimated at N2.45 trillion and a sinking fund to retire maturing obligations issued to local contractors and other creditors in the sum of N296 billion. So, there is a total sum of N3.43 trillion that is provided for personnel and pension cost inclusive of N218 billion for the top 19 government-owned enterprises in the country. This represents an increase of N453 billion over the 2019 approved budgetary expenditure. This also implies a 40 percent of this recurrent expenditure to the projected revenue. The budget deficit is projected at N2.15 trillion in the year 2020 and this is lower than what was approved in the 2019 budget which was N2.47 trillion. Let me state that these projections include draw downs on project tied loans and this represent 1.51 percent of estimated gross domestic product (GDP). This is well below what is allowed by the Fiscal Responsibility Act (FRA) of 2007 which is still put at three per cent. I want to add that council approved our presentation and so the next phase for us is to consult with the National Assembly and then the Medium Term Expenditure Framework (MTEF) to the National Assembly for its own view and subsequent approval.”

Recall, InsideOjodu had earlier reported that the federal government was intending to upwardly review the Value Added Tax (VAT) as a means of funding the national minimum wage.

Ajaero revealed this, while speaking to newsmen in Lagos in reaction to Federal Government’s indication that it might increase VAT to enable it pay the minimum wage.

The National Assembly had on Tuesday passed N30, 000 as the new minimum wage for workers; two months after the House of Representatives also approved the same.

The Minister of Budget and Planning, Sen. Udo Udoma had at a meeting in Abuja said that VAT could be raised to 50 per cent before the end of 2019 to enable the government fund the new wage.

The VAT is currently being charged at five per cent. The ULC president said that there was no condition attached to the increase in salaries for workers during the tripartite negotiation.

He said that if the government was contemplating increase in VAT to fund the new minimum wage, it should be discussed with stakeholders.

“There was no condition attached during minimum wage negotiation. If there will be increase in VAT, all stakeholders will look at it and take a decision,’’ the labour leader said.

He commended the Senate for quick approval, but said that President Muhammadu Buhari should not delay in signing the bill for it to be implemented.

Meanwhile, the Trade Union Congress of Nigeria (TUC) had commended the Senate for endorsing the N30, 000 monthly National Minimum Wage as recommended by the Tripartite Committee.

Mr Bobboi Bala Kaigama in a statement said the new wage would in no small measure give the workers a sense of belonging.

Kaigama said it was regrettable that inflation has affected the purchasing power of the new wage, as prices of commodities had risen even when employers have not commenced payment.

He urged the 9th Assembly to prevail on governors to pay workers their salaries and pension as and when due to avoid industrial crisis.