Charles Abuede
With a significant recovery recorded revenue from taxes as the economy shifts away from the claws of the coronavirus pandemic which has hampered the revenue generation ability of various sectors of the Nigerian economy. Consequently, revenue generated from Nigeria’s company income tax (CIT) increased by 32.84 per cent year on year to N392.77 billion in the first quarter of 2021. This significant increase in the tax revenue also signifies a 32.82 per cent quarter on quarter growth from N295.68 billion in the final three months of 2020.
Meanwhile, the total revenue generated from these taxes represents about 86.1 per cent of the projected tax revenue of N920.14 billion in the 2021 budget document. However, the federal government has collected a total of N496.4 billion as revenue from value-added taxes from various sectors of the economy, rising by 52.93 per cent year on year on the back of rising crude oil prices. Nevertheless, with crude oil prices recording upticks in recent weeks and also anticipated to hit $80 per barrel by end of August 2021, the total revenue is expected to increase moderately in subsequent quarters of the year.
Recent data verified, validated and published by the National Bureau of Statistics (NBS), Nigeria, on company income tax breakdown by sectors for Q1 2021 shows. According to the report by the national statistics office, out of the total amount generated in the first quarter of 2021, N152.33 billion was generated as company income tax locally while N184.59 billion was generated as foreign company income tax payments and the balance of N55.85 billion was generated as income tax from other payments.
Breakdown of the data on a sectorial front during the quarter saw the Breweries, Bottling and Beverages sector generated the highest amount of company income tax with N23.26 billion, indicating a 329.5 per cent rise year on year from the previous year’s performance and was closely followed by professional services including telecoms which generated N18.17 billion in company income tax. Despite the performance, the figure fell short of the year on year figure by 36.84 per cent from Q1 2020 figures and in the same vein the last quarter of 2020 figure by 43.52 per cent quarter on quarter decline. Furthermore, the CIT report for the first quarter of 2021 also revealed that State Ministries & Parastatals followed the log of highly generating sectors after it recorded the sum of N17.35 billion.
Major highlights from the data revealed that Other Manufacturing generated N16.25 billion; Oil Producing companies generated N15.36 billion, while Not Available and Commercial and Trading companies generated N14.61 billion and N13.5 billion as company income taxes for the first three months of 2021 respectively.
Furthermore, companies within the Banks & Financial Institutions canvassed N9.25 billion; Federal Ministries & Parastatals N6.35 billion; Transport and Haulage Services N4.48 billion; Stevedoring, Clearing and Forwarding; and Properties and Investments sectors with N1.6 billion and N1.08 billion respectively all contributed to the positive growth of the total quarterly growth of the company income tax.
Other sectors of the Nigerian economy such as the Pharmaceutical, Soaps and Toiletries with N958 million; Agricultural and Plantations sector generated N924 million; gas with N805.9 million; Hotels and catering sector reported N789.8 million while Building and Construction, Chemicals, Paints and Allied Industries and the Conglomerates sectors all report incomes taxes in the tune of N2.3 million, N354.35 million and N568.84 million respectively. Meanwhile, the Textile and Garment Industry generated the lowest revenue and was closely followed by the Mining and Automobiles and Assemblies with N13.49 million, N34.40 million and N73.57 million generated respectively.
