Economic analysts are expressing concern over the sharp increase in Nigeria’s Value Added Tax (VAT) revenue, which surged by N1.83 trillion year-over-year. The jump, which saw VAT collections reach N3.62 trillion between January and July 2024—a 102% increase from N1.79 trillion in the same period in 2023—reflects broader economic shifts but raises worries about the inflationary impact on consumers.
The increase was driven by stronger domestic consumption, improved VAT enforcement, and rising inflation, particularly affecting Import VAT. While the revenue boost helps address fiscal deficits, experts caution that it may reduce consumers’ purchasing power, potentially slowing economic activity and growth.
