The federal government generated N469.01 billion from company income tax (CIT) in the first quarter (Q1) of 2023.
The accrual decreased by 37.79 percent from N753.88 billion earned in the previous quarter (Q4 2022), the National Bureau of Statistics (NBS) said in its latest CIT report for the first three months of the year.
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.
Currently, the tax is charged at the rate of 30 percent for companies with more than N100 million in turnover, and 20 percent for companies with a turnover ranging between N25 million and N100 million.
According to the NBS report, CIT payments from local companies totalled N300.78 billion, while foreign firms contributed N168.23 billion in the quarter reviewed.
“On a quarter-on-quarter basis, the financial and insurance activities recorded the highest growth rate with 50.42 percent, followed by construction with 42.32,” the report reads.
“On the other hand, water supply, sewerage, waste management, and remediation activities had the lowest growth rate with -69.38 percent, followed by other service activities with -60.13 percent.
“In terms of sectoral contributions, the top three largest shares in Q1 2023 were financial and insurance activities with 22.94 percent; manufacturing with 20.91 percent; and information and communication with 11.89 percent.
“Conversely, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.01 percent, followed by water supply, sewerage, waste management, and remediation activities with 0.04 percent; and activities of extraterritorial organisations and bodies with 0.12 percent.
“However, on a year-on-year basis, CIT collections in Q1 2023 decreased by 14.96 percent from Q1 2022.”
Last year, the federal government raked in N2.83 trillion from CIT, an increase of 116.75 percent relative to the N1.69 trillion recorded in 2021.