This was revealed by the country’s National Bureau of Statistics (NBS) in its most current CIT report for the fourth quarter (Q4) of 2022. Weak income collection has proven to be an issue for Nigeria’s finances, impacting the country’s capacity to finance its budget, therefore the recourse to debt acquisition.
The CIT is a tax on the earnings of registered companies in Nigeria that serves as one of the government’s revenue-generating strategies. It also covers the tax on profits earned by international enterprises doing business in the country. The tax is now imposed at a rate of 30% for firms with a turnover of more than N100 million, and 20% for enterprises with a turnover of N25 million to N100 million.
According to the most recent CIT data, the federal government received a total income of N551.53 billion in Q1 2022, which climbed to N714.40 billion in Q2. CIT revenue rose to N810.19 billion in Q3 of the same year but decreased 6.95 percent in Q4 to N753.88 billion.
The quarterly figures (Q1, Q2, Q3, and Q4) indicate a total tax revenue yield of N2.83 trillion in 2022. According to the NBS, the 2022 data reveals that the federal government boosted CIT by 116.75 percent in one year, from N1.69 trillion in 2021 to N2.83 trillion in 2022.
Local payments contributed N1.09 trillion in 2021 but climbed by 36.72% to N1.68 trillion in 2022, while foreign CIT payments were N1.15 trillion in 2022, up from N527.62 billion in 2021.
Notwithstanding currency fluctuations, the manufacturing sector dominated the list of sectorial 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 at the same time in 2021.
In the report, the information and communication industry came in second with N362.26 billion in income tax payments to the government. Also, the banking and insurance sectors remitted N208.93 billion in CIT, followed by mining and quarrying with a price of N141.58 billion.
Other industries with increasing tax collections include public administration and defense, obligatory social security (N95.39 billion sent); other service activities (N79.41 billion remitted); and transportation and storage (N69.65 billion remitted).
