According to data was analyzed from the quarterly VAT report released by the National Bureau of Statistics (NBS), the construction and real estate sector in Nigeria has contributed a total of N70 billion in Value Added Tax (VAT) payments over the course of five years. The report highlights a significant increase in VAT generated by the sector, rising by 124 percent from N10 billion in 2018 to N22.45 billion in 2022. The
VAT is a consumption tax that is paid when goods are purchased and services are rendered. It is a multi-stage tax that is ultimately borne by the final consumer and is charged at a rate of 7.5 percent. The revenue generated from VAT is typically disbursed to the three tiers of government through the Federation Accounts Allocation Committee.
A review of 17 documents obtained from the NBS revealed that VAT generated from the construction and real estate sector was N10 billion in 2018, N10.17 billion in 2019, N11.38 billion in 2020, N15.89 billion in 2021, and N22.45 billion in 2022.
The increase in VAT revenue from the sector reflects the growth and economic activity within the construction and real estate industry. Nigeria’s VAT revenue has experienced significant growth in recent years, primarily due to the increment of the VAT rate from 5 percent to 7.5 percent in 2020.
The contribution of the construction and real estate sector to VAT payments underscores its importance in the Nigerian economy. The sector plays a crucial role in infrastructure development, job creation, and overall economic growth. The rise in VAT revenue from the sector indicates the increasing level of economic activity and investment in construction and real estate projects across the country.
The government’s focus on infrastructure development and the favorable investment climate in the sector have contributed to its growth. It is expected that this positive trend will continue, further stimulating economic growth and revenue generation for the government.
