Government revenue got a boost as taxes from companies and consumers rose by 96.11 per cent to N2.31 trillion in the second quarter of 2023.
According to the latest report by the National Bureau of Statistics (NBS), this signifies a significant rise from N1.18 trillion recorded in the first quarter of the year.
The report indicates that the bumper harvest in tax returns into the government coffers in Q2 was spurred by a 226.40 per cent jump seen in Company Income Tax (CIT) from N469.01 billion in Q1 to N1.53 trillion in Q2 2023.
Companies in Nigeria paid about N1.53 trillion as taxes to the government in the three-month period spanning April to June this year. According to the Federal Inland Revenue Service (FIRS), CIT is a 30 per cent tax imposed on the profits of companies.
Further analysis of the figures by BUSINESS METRICS revealed that this is the first time companies have paid over N1 trillion tax in a single quarter.
Available data from the NBS showed that the amount collected in Q2 2023 is higher than the total amount collected each year in 2015 (N1.38 trillion), 2016 (N1.02 trillion), 2017 (N1.25 trillion), and 2018 (N1.41 trillion).
The previous highest amount collected was N810.19 billion in Q3 2023, while the lowest was N155.96 billion in Q1 2017.
VAT, a 7.5 per cent consumption tax borne by the final consumer of a product, only increased by 10.11 per cent q-o-q in Q2 to N781.35 billion from N709.59 billion in Q1.
Commenting on the taxes, the NBS said, “On the aggregate, CIT for Q2 2023 was reported at N1.53 trillion, indicating a growth rate of 226.40 per cent on a quarter-on-quarter basis from N469.01 billion in Q1 2023. Local payments received were N1.02 trillion, while Foreign CIT Payment contributed N505.91 billion in Q2 2023.”
For VAT, it stated, “On the aggregate, VAT for Q2 2023 was reported at N781.35 billion, showing a growth rate of 10.11 per cent on a quarter-on-quarter basis from N709.59 billion in Q1 2023. Local payments recorded were N512.03 billion, Foreign VAT Payments were N142.63 billion, while import VAT contributed N126.69 billion in Q2 2023.”
Water supply, sewerage, waste management, and remediation activities (626.52 per cent), accommodation and food service activities (585.11 per cent) recorded the most CIT growth.
The manufacturing sector (25.63 per cent); financial and insurance sector (24.47 per cent); and information and communication (20.30 per cent), were the three largest contributors to CIT.
The activities of extraterritorial organisations and bodies (212.06 per cent), and real estate activities (123.09 per cent) recorded the most VAT growth. Manufacturing (29.64 per cent); information and communication (21.19 per cent); and financial and insurance activities (11.18 per cent) were the three largest contributors to VAT.