Q2 2020 experienced one of the toughest economic disruptions with the novel COVID-19 Pandemic having drastic effects on most sectors of the economy. The Nationwide lockdown also aggregated this and led to the poor performance of most sectors of the economy. However, the economy gradually picked up in Q3 2020.
The Q3 2020 Sectoral Distribution of Valued Added Tax (VAT) Report by the National Bureau of Statistics Perform has revealed that N424.71bn was generated as VAT in Q3 2020 compared to the N327.20bn generated in Q2 2020 and the N275.12bn generated in Q3 2019. This represents a 29.80% increase Quarter-on-Quarter and 54.37% increase Year-on-Year.
The three sectors that generated the highest amount of VAT are:
1. Other Manufacturing Sector: This sector generated the highest amount of N47.07 billion.
2. Professional Services Sector: This sector generated the second highest amount of N44.01 billion.
3. Commercial and Trading Sector: This sector generated the third highest amount of N21.18 billion.
The three sectors that performed the least and generated the lowest amounts are:
1. Mining Sector: This sector generated the least amount of N64.50 million.
2. Textile & Garment Sector: This sector generated the second least amount of N346.27 million.
3. Pharmaceutical, Soaps and Toiletries Sector: This sector generated the third least amount of 386.27 million.
The economy started picking up in Q3 2020 with the easing of the lockdown across states in Nigeria as well as businesses gradually returning to normalcy. The increase of VAT by 2.5% in 2020 seems to have a great move by the Government as 2020 experienced a drastic decline of global oil prices. Diversification of the economy came into play with increased revenue from VAT.