In the first quarter of this year, Nigeria generated a total of N532.48 billion as revenue from Company Income Tax (CIT). Foreign CIT payment accounts for 60.7% of this figure, while 39.3% of the CIT came from local companies. This is contained in the latest CIT data released by the National Bureau of Statistics (NBS).
CIT is a revenue sourced by the government from its levies on both local and international companies operating in the country. Currently, the Nigerian government charges a 30% rate for CIT on companies’ profits assessed on the previous year’s performance.
In Q1 2022, a total of N532.48 billion was generated by the government, which is 53.1% higher than the N347.81 billion generated in the previous quarter (Q4 2021). On a year-on-year basis, the revenue in Q1 2022 increased by 35.6% compared to that of Q1 2021.
An analysis of the CIT revenue from 2018 till Q1 2022 shows that the amount generated in the first quarter of this year is the highest the country has recorded since Q1 2018.
The lowest revenue generated was in Q1 2018. Prior to Q1 2022, the highest revenue from CIT was in Q3 2019.
Further analysis shows that before Q1 2021, the lowest revenue in a year was always recorded in the first quarter of the year, within the period under review, then picks up from the second quarter.
Of the N532.48 billion, local sectoral collections contributed N209.13 billion, while N323.35 billion was from foreign sources. Compared to Q4 2021, sectoral collections dropped by 19.2%, while foreign sources rose by 263.5%.
Based on sectoral returns, the manufacturing, and information and communication sector contributed the highest shares — 21.31% and 14.03%, respectively.
The financial and insurance activities and mining and quarrying sectors followed with 12.2% and 11.66% contribution. Altogether, the four sectors accounted for 59.2% of the N209.13 billion generated from the sectoral collections.
Activities of households as employers, water supply, activities of extraterritorial organisations and bodies, real estate activities, accommodation and food services, and art, entertainment and recreation all contributed less than 1%.
Further analysis of the CIT data shows that, except for activities of extraterritorial organisations and bodies, administrative and support service activities, construction and education, every other sector recorded a drop in its revenue in Q1 2022 compared to what was generated in Q4 2021.
With this trend, the country may witness an increase in its revenue in Q2 2022. However, the government may have to look at its local policies in order to increase revenue from local companies.