Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 4)

Data from the National Bureau of Statistics (NBS) shows an overall increase in tax revenues for 2020. Total revenue generated from Value Added Tax (VAT)1 and Company Income Tax (CIT)2 stood at approximately N2.94trillion, representing a 5% increase from N2.81trillion reported in prior year. However, although the net revenue showed growth, only VAT receipts increased year-on-year by 29%, whereas, CIT revenue decreased by 13%. The professional services sector was the biggest contributor to both VAT and CIT receipts, while mining and textile/garment industry generated the least VAT and CIT revenues respectively. Considering the economic circumstances during 2020, the slight growth in tax revenues is a positive indicator. It is important for tax policymakers to continue monitoring the effectiveness and impact of ongoing tax reforms on the economy.

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