According to the report, the arts, entertainment, and recreation sectors recorded the highest growth rate at 43.82%, followed by human health and social work activities at 35.82%. On the other hand, agriculture, forestry, and fishing had the lowest growth rate at 30.12%, followed by activities of extra-territorial organizations and bodies at 19.81%.
The top three sectors with the most significant shares in Q4 2022 were manufacturing with 32.17%, information and communication with 18.05%, and public administration and defence, compulsory social security with 9.87%. Conversely, activities of households as employers, undifferentiated goods and services-producing activities of families for own use recorded the most negligible share with 0.01%. This was followed by actions of extra-territorial organizations and bodies with 0.05%, and water supply, sewerage, waste management and remediation activities with 0.07%.
The report showed that VAT collections for Q4 2022 increased by 21.71% on a year-on-year basis from Q4 2021. The NBS report indicates that the Nigerian government has recorded an increase in revenue from VAT collection, which could be attributed to the rise in business activities in the country.
The VAT is a consumption tax on goods and services produced domestically or imported into the country. The tax is collected at every production and distribution stage, with the consumer's final cost. The revenue generated from VAT collection is shared between the federal and state governments.
The Nigerian government has been implementing measures to improve its revenue generation and reduce its dependence on crude oil revenue. The increase in VAT collections is a step in the right direction towards achieving this goal. The government can use the revenue generated from VAT collection to fund infrastructure projects and other development programs.
The NBS report highlights the importance of improving tax administration and compliance to increasing revenue generation in the country. The government can achieve this by implementing tax reforms that simplify and enhance tax compliance. This would increase revenue generation and reduce the burden of taxation on the citizens.