The federal government generated N2.1 trillion from company income tax (CIT) in the first nine months of 2022.
The National Bureau of Statistics (NBS) disclosed this in its recent CIT report for the third quarter (Q3) of 2022.
Poor revenue generation has continued to pose a challenge to Nigeria’s finances, ultimately affecting its capability to finance its budget — hence the resort to debt acquisition.
President Muhammadu Buhari had said the country’s poor performance in resource mobilisation was a source of concern, as “tax revenues are approximately 8 percent of our output”.
Buhari, in September, inaugurated a presidential committee on the national economy, to provide solutions to the country’s economic troubles, especially in the area of getting revenue.
As one of the government’s revenue-generating mechanisms, the CIT is a tax on the profits of registered companies in Nigeria. It also includes the tax on the profits of foreign firms operating in the country.
The tax is currently charged at the rate of 30 percent for companies having more than N100 million in turnover, and 20 percent for companies with a turnover ranging between N25 million and N100 million.
In the latest CIT report, NBS said in Q1, the federal government got a total revenue of N551.5 billion; and in Q2, the figure increased to N714.4 billion.
As at Q3 of 2022, the CIT revenue increased to N810.2 billion. This gives a total of N2.1 trillion revenue yield from tax in nine months (Q1,Q2, and Q3).
The NBS said the figure represents an increase of 55 percent when compared to the N1.3 trillion generated in the first nine months of 2021.
For the period under review, local payments contributed N1.3 trillion while foreign CIT payments amounted to N749.82 billion.
Despite foreign exchange (FX) challenges, the manufacturing sector led the list of sectorial contributions with N358.2 billion in income tax paid to the federal government in nine months. According to NBS, the revenue from this sector represents an increase of 121 percent compared to the N162.2 billion recorded in the same period in 2021.
The information and communication sector followed with N131.2 billion in income tax paid to the federal government.
The report said the financial and insurance sector remitted a sum of N163 billion as CIT, followed by mining quarrying with a remittance of N114.3 billion.
Other sectors with increased tax revenues include; the public administration and defence, compulsory social security with N68.3 billion remitted; other service activities generated N56 billion; and transportation and storage sector remitted N56.3 billion.
ARTS, ENTERTAINMENT AND RECREATION RECORD HIGHEST (Q-ON-Q) GROWTH RATE
In 2021, Nigeria held 97 percent of the box office revenue from movies in West Africa, whereas in 2020 it accounted for 99 percent of the revenue. Due to the coronavirus pandemic, movie theatres were closed in Liberia, Ghana, and Nigeria. They reopened only in Nigeria in September 2020.
Analysis of the NBS data by TheCable Index, shows that the arts, entertainment and recreation sector, which comprises the fashion, music and movie industries, recorded the highest growth rate on quarter-on-quarter (q-on-q) basis.
In Q1 of 2022, the sector remitted N2.1 billion to the federal government and by Q2 of the same year, the figure increased to N3.38 billion.
More so, in Q3, the figure doubled to N6.54 billion, which makes a total of N11.99 billion in nine months.
This also means that the sector increased its remittance to the government in Q3 2022 by 93 percent, when compared to Q2; followed by agriculture, forestry, and fishing with 75.38 percent.
On the other hand, accommodation and food service activities had the lowest growth rate at -64.81 percent, followed by water supply, sewerage, waste management, and remediation activities at -64.75 percent.
Source: Top Stories