(Ecofin Agency) - In June 2024, Nigeria’s inflation reached a 28-year high, hitting 34.19%, up from 33.95% in May 2024. As the country faces tough economic times, the government is working to restore stability.

Nigeria’s value-added tax (VAT) revenue increased by 99.82% year-over-year in the second quarter of 2024, according to data released by the National Bureau of Statistics (NBS). During this period, total VAT revenue reached 1.56 trillion naira (about $955 million), a 9.11% increase compared to the previous quarter.

The NBS report, published on September 9, highlighted that the growth was driven primarily by local payments, which brought in about $484 million, while foreign payments contributed $242 million. VAT on imports generated $228 million.

“On a quarter-on-quarter basis, Human health and social work activities recorded the highest growth rate with 98.44%, followed by agriculture, forestry and fishing with 70.26%, and Water supply, sewerage, waste management and remediation activities with 59.75%,” the report noted.

This news comes as Nigeria struggles with rising inflation (34.19% in June 2024, the highest in 28 years) caused by the depreciation of the naira, increased production costs, and reduced energy subsidies. The federal government has announced several measures to tackle the economic challenges. Earlier in September, Taiwo Oyedele, the Chairman of the Committee on Fiscal Policy and Tax Reforms, announced the removal of several taxes on essential goods, including VAT.

Amid growing speculation about a potential VAT increase, the Federal Ministry of Finance released a statement on Monday denying “reports suggesting that the President Bola Ahmed Tinubu-led Administration plans to raise Nigeria’s Value-Added Tax (VAT) from 7.5% to 10%.”