Report Reveals Real Estate Sector Paid N70bn VAT In Five Years

Value Added Tax

Report Reveals Real Estate Sector Paid N70bn VAT In Five Years

Value Added Tax (VAT) generated from the construction and real estate sector rose by 124 per cent from N10bn in 2018 to N22.45bn in 2022.

An analysis of the National Bureau of Statistics’ quarterly VAT report showed that the sector also generated a total of N70bn within the period under review.

Economic Confidential reports that VAT is a consumption tax paid when goods are purchased and services rendered. It is a multi-stage tax, is borne by the final consumer and charged at a rate of 7.5 per cent.

The NBS stated that revenue generated from VAT is usually disbursed to the three tiers of government through the Federation Accounts Allocation Committee.

A review of 17 documents obtained from the National Bureau of Statistics showed that the VAT country generated from the construction and real estate sector was N10bn in 2018 and N10.17bn in 2019.

In 2020 it amounted to N11.38bn, N15.89bn in 2021 and N22.45bn in 2022.

Nigeria’s VAT revenue has grown significantly in recent years, following the increment of the VAT rate from 5 per cent to 7.5 per cent in 2020.

Since the review of the VAT rate, Nigeria’s revenue from VAT collection has doubled. Meanwhile, the N2.51 trillion recorded in 2022 is the highest on record.

But despite increases in VAT revenues, there has been a new push for another upward of VAT rate. According to the former Minister of Finance, Zainab Ahmed, the incoming government should increase VAT rates from 7.5 per cent to 10 per cent.

Reacting in an earlier interview, the Director of the Centre for the Promotion of Private Enterprise, Muda Yusuf, called for a review of VAT, especially in light of all the challenges that businesses were facing.

“Businesses are the main contributors of VAT and there are some other taxes that have already been proposed under the finance bill like excise and telecom tax. So, we have to be careful so as not to increase the burden on businesses.

“The better thing is to bring more people into the tax net than to impose more burden on those in the tax net.”

The Chief Executive Officer of Cowry Assets, Johnson Chukwu, pointed out that the hallmarks of a good tax system are the ease of collection, low cost and convenience of payment.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : EconomicConfidential – https://economicconfidential.com/2023/07/real-estate-sector-tax/?utm_source=rss&utm_medium=rss&utm_campaign=real-estate-sector-tax