This was revealed by the country’s National Bureau of Statistics (NBS) in its latest CIT report for the fourth quarter (Q4) of 2022. Weak revenue collection has proven to be a problem for Nigeria’s finances, affecting the country’s capacity to finance the budget. , hence recourse to debt acquisition.
CIT is a tax on the income of registered companies in Nigeria which is one of the government’s revenue generation strategies. It also includes taxes on profits earned by international companies doing business in the country. The tax is currently levied at the rate of 30% for companies with a turnover of more than N100 million, and 20% for companies with a turnover of N25 million to N100 million.
According to the latest CIT data, the federal government received a total revenue of N551.53 billion in Q1 2022, which increased to N714.40 billion in Q2. CIT’s revenue rose to N810.19 billion in Q3 of the same year but fell by 6.95 percent in Q4 to N753.88 billion.
Quarterly figures (Q1, Q2, Q3, and Q4) show a total tax revenue of N2.83 trillion in 2022. According to the NBS, the 2022 data shows that the federal government increased CIT by 116.75 percent in one year, from N1.69 trillion in 2021 to N2.83 trillion by 2022.
Local payments accounted for N1.09 trillion in 2021 but increased by 36.72% to N1.68 trillion in 2022, while foreign CIT payments were N1.15 trillion in 2022, from N527.62 billion in 2021.
Despite currency fluctuations, the manufacturing sector dominated the list of sectoral contributions in 2022, with N468.59 billion given to the federal government as income tax.
According to the bureau, income from this sector increased by 114.84 percent compared to the N207.34 billion reported for the same period in 2021.
In the report, the information and communication industry came second with an income tax payment of N362.26 billion to the government. Also, the banking and insurance sector posted N208.93 billion in CIT, followed by mining and quarrying with N141.58 billion.
Other industries that increased tax collection include public administration and defence, compulsory social security (N95.39 billion was sent); other service activities (N79.41 billion delivered); and transportation and storage (N69.65 billion delivered).