Nigeria in pre-covid-19 company tax earnings rebound at N532.5bn

BY CHARLES ABUEDE

Total company income tax (CIT) collected by Nigeria’s federal government rose 35.61 percent year on year to N532.5 billion in the first quarter of 2022, from N392.8 billion recorded in the same quarter of 2021. The reported figure reaches the pre-covid-19 levels of N520.9 billion recorded in the third quarter of 2019 resulting from the boost in business and economic activities in the economy which was triggered by stanching pressures from the Covid-19 pandemic.

On a quarter on quarter basis, the amount generated in the first three months of 2022 represented an increase of 53.09 percent over the N347.81 billion generated in the fourth quarter of 2021.

The performance scorecard is contained in the company income tax report collated and verified by the Federal Inland Revenue Service (FIRS) and published by the National Bureau of Statistics (NBS).

Nigeria’s revenue collection is now in full gear as the economy fully recovers from the pressures of the coronavirus and the omicron virus, which may have been seen to hamper government revenues collected through taxes. Although the federal government, gunning heavily on means or streams of revenue generation strategy, appears now to begin to realise the full potential of the Finance Act of 2021, which was signed into law earlier in the year.

The data published by the NBS for the first quarter of 2022 showed that the increase in CIT was majorly due to the activities of extraterritorial organisations and bodies which, during the quarter, recorded the highest growth rate with 60.61 percent to N717.95 million from N447 million in the prior quarter, followed by education with 39.76 percent to N5.24 billion, and construction sector with 38.98 percent to N7.5 billion.

Also, from the report by the Abuja-based statistics office, there were drags on the growth of company tax during the review quarter from the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate in the negative at 79.94 percent to N38 million from the N188.5 million reported in the previous quarter. This was followed by total taxes generated from accommodation and food service activities, which also downed itself in the negative at 51.07 percent to print at N1.1 billion from N2.2 billion the last time.

In terms of sectoral contributions, the NBS report highlighted that the top three largest shares in Q1 2022 were manufacturing with a 21.31 percent quarter on quarter rise to N44.6 billion, information and communication with a 14.03 percent increase in total tax to N29.4 billion, and financial and insurance sectoral activities with 12.20 percent increase to N25.51 billion in that order.

On the other hand, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.02 percent quarter on quarter to N38 million, followed by activities of water supply, sewerage, waste management and remediation with 0.19 percent or N398.8 million, and then the activities of extraterritorial organisations and bodies with 0.34 percent or N717.95 million.

Meanwhile, the statistics bureau reported that the aggregate CIT came from the local payments which were recorded at N209.13 billion in Q1 2022, while Foreign CIT Payment contributed N323.35 billion during the review period.