The federal government collected a total of N2.83 trillion in corporation income tax (CIT) revenue in 2022, a 116 percent increase from 2021.
This was announced by the National Bureau of Statistics (NBS) in its recent CIT report for the fourth quarter (Q4) of 2022.
Inadequate revenue collection has remained a problem for Nigeria’s finances, ultimately impacting the country’s capacity to finance its budget – therefore the recourse to debt acquisition.
President Muhammadu Buhari stated last year that the country’s low performance in resource mobilisation was cause for concern, given that “tax receipts account for around 8% of our output.”
In September 2022, Buhari established a presidential committee on the national economy to give remedies to the nation’s economic woes, particularly in the area of income generation.
As one of the government’s strategies for producing money, the CIT is a tax on the profits of Nigerian enterprises that are registered. It also includes the tax on the profits of international companies operating within the nation.
The tax rate is now 30 per cent for firms with a turnover of more than N100 million and 20 per cent for enterprises with a turnover between N25 million and N100 million.
According to the most recent CIT data from NBS, the federal government earned N551.53 billion in Q1 2022 and N714.40 billion in Q2 2022.
In the third quarter of the same year, CIT revenue grew to N810.19 billion but decreased by 6.95 per cent in the fourth quarter to N758.8 billion.
The quarterly figures (Q1, Q2, Q3, and Q4) indicate a total tax revenue yield of N2.83 trillion in 2022.
According to the National Bureau of Statistics, the federal government boosted CIT by 116.75 per cent in one year, from N1.69 trillion in 2021 to N2.83 trillion in 2022.
Local payments contributed N1.09 trillion in 2021 and grew by 36.72 percent to N1.68 trillion in 2022, but foreign CIT payments increased from N527.62 billion in 2021 to N1.15 trillion in 2022.
MANUFACTURING REPORTS THE HIGHEST SECTORAL CONTRIBUTION IN THE LAST TWELVE MONTHS
Notwithstanding foreign exchange (FX) issues, the manufacturing sector headed the list of sectoral contributions to the federal government in 2022, paying N468.59 billion in income tax.
This sector’s revenue increased by 114.84 percent compared to the N207.34 billion reported during the same time in 2021, according to the bureau.
According to the report, the information and communication sector paid N362,26 billion in income taxes to the government.
According to the report, the finance and insurance sector submitted N208.93 billion in CIT, followed by the mining and quarrying industry with N141.58 billion.
Other sectors with higher tax revenues include public administration and defense, obligatory social security, which contributed N95.39 billion; other service activities, which contributed N79.41 billion; and the transportation and storage sector, which contributed N69.65 billion.