Experts worry over VAT revenue surge

Economic analysts have expressed concerns over the sharp increase in Value Added Tax (VAT) revenue, which jumped by N1.83 trillion year-over-year. While the surge reflects broader economic shifts, it also raises questions about the inflationary impact on everyday Nigerians.

Between January and July 2024, Nigeria’s VAT revenue soared to N3.62 trillion, marking a 102% increase from the N1.79 trillion collected during the same period in 2023. Non-Import VAT contributed significantly to this increase, highlighting stronger domestic consumption and improved VAT enforcement, while Import VAT surged due to rising inflation and exchange rate fluctuations.

However, experts warn that while this revenue boost addresses fiscal deficits, it may also strain consumers’ purchasing power, leading to reduced economic activity and slower growth.