Federal revenue from Value Added Tax (VAT) in Nigeria Surged by 62% Year-on-Year in the Fourth Quarter of 2024, Reaching N1.95 Trillion According to the National Bureau of Statistics (NBS)
In a significant development, the Value Added Tax (VAT) collection for the fourth quarter of 2024 reached a remarkable N1.95 trillion, marking a 9.23% increase from the previous quarter's collection of N1.78 trillion.
The manufacturing sector led the sectoral contributions, accounting for 25.89% of the total VAT collections. The information and communication sector followed closely with a 16.18% share. Other significant contributors included mining and quarrying (15.52%), and human health and social work activities (11.81%).
Activities of extraterritorial organizations and bodies, and water supply, sewerage, waste management, had a minimal 0.04% contribution each to the VAT collections. However, it was the extraterritorial organizations that saw the highest growth rate in Q4 2024, with a staggering 180.05% increase.
On the other hand, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use contracted by 28.97%. The information and communication sector also experienced a contraction of 23.00%. Agriculture, forestry, and fishing, however, showed a positive trend with a growth rate of 70.83%.
In the world of tax reform, President Bola Tinubu signed four key bills into law in June 2025. These bills, which include the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill, were passed by the National Assembly after months of consultation with various interest groups and stakeholders. The signing ceremony took place at the Presidential Villa.
On a year-on-year basis, VAT collections in Q4 2024 increased by 62.19% compared to Q4 2023. Import VAT contributed N474.75 billion in Q4 2024, while domestic VAT payments amounted to N917.40 billion. Non-import foreign VAT Payments were N554.68 billion.
The four bills aim to streamline tax administration, improve the efficiency of the Nigeria Revenue Service, and establish a Joint Revenue Board to oversee the collection and distribution of revenues among various tiers of government. With these reforms in place, the future of Nigeria's tax system looks promising.
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