The Federal government increased the revenue generated from income tax by 116% in 2022, accruing N2.8 trillion from companies in the country.
The National Bureau of Statistics (NBS) disclosed this in its recent CIT report for the fourth quarter (Q4) 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.
Last year, 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 2022, 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 latest the CIT report, NBS said in Q1 2022, the federal government got a total revenue of N551.53 billion; and in Q2, the figure increased to N714.40 billion.
In Q3 of the same year, the CIT revenue further increased to N810.19 billion but had a 6.95 percent decrease in Q4 to N753.88 billion.
The quarterly results (Q1,Q2, Q3 and Q4) give a total of N2.83 trillion revenue yield from tax in 2022.
According to the NBS, the 2022 figure shows that in one year, the federal government increased CIT from N1.69 trillion in 2021 to N2.83 trillion in 2022, which is a 116.75 percent increase.
In 2021, local payments contributed N1.09 trillion but increased by 36.72 percent to N1.68 trillion in 2022, while foreign CIT payments amounted to N1.15 trillion in 2022 from N527.62 billion in 2021.
Despite foreign exchange (FX) challenges, the manufacturing sector led the list of sectorial contributions with N468.59 billion paid to the federal government as income tax in 2022.
The bureau said the revenue from this sector represents an increase of 114.84 percent compared to the N207.34 billion recorded in the same period in 2021.
It stated that the information and communication sector followed with a N362.26 billion in income tax remittance to the government.
The report also said the financial and insurance sector remitted the sum of N208.93 billion as CIT, followed by mining quarrying with a remittance of N141.58 billion.
Other sectors with increased tax revenues include; the public administration and defence, compulsory social security with N95.39 billion remitted; other service activities generated N79.41 billion; and transportation and storage sector remitted N69.65 billion.
Submit press release, news tips to us: firstname.lastname@example.org | Follow us @ODUNewsNG