Katsina State gets N.5bn monthly when FG increase VAT to 7.2% – Analysis
A recent analysis made by a Civic and transparency giant company, BudgIT has calculated an average monthly allocation increase that the 36 states of the Federation will get after the federal government implemented the value-added tax (VAT).
As stated by the FG, 85% of VAT receipts goes to states and local governments.
— BudgIT Nigeria (@BudgITng) September 13, 2019
According to the analysis, Lagos state will get the largest share after the VAT increase with N3.6bn then followed by Kano State with N804m.
Katsina State is the 6th state which will benefit from the VAT increase with N571m.
Recall that the Nigerian government has approved an increase in Value Added Tax (VAT) rate from 5% to 7.2% to expand fiscal revenue in the country.
Zainab Ahmed, Nigeria’s Finance Minister, Budget & National Planning stated this at the end of the weekly Federal Executive Council (FEC) on Wednesday, September 11th.
In Nigeria, Value Added Tax (VAT) is payable on goods and services consumed by any person, whether government agencies, business organization or individuals.
According to the Value Added Tax Act Cap V1 LFN 2004 (as amended), some of the items excluded from VAT include medical and pharmaceutical raw materials and products, basic food items, baby products, commercial vehicles and spare parts, fertilizer, diplomatic goods, and others.