Company Income Tax grows to N472.52b, VAT declines

Company Income Tax rises by N45m, VAT dips by N11.76b

By Jeph Ajobaju, Chief Copy Editor

Company Income Tax (CIT) grew from N472.07 billion in the second quarter of 2021 (Q2 2021) to N472.52 billion in Q3 2021 but Value Added Tax (VAT) declined 2.3 per cent from N512.25 billion to N500.49 billion.

Despite the quarter-on-quarter VAT decline, it grew 17.8 per cent on N424.7 billion in Q3 2020.

The data, supplied by the National Bureau of Statistics (NBS) in its latest report, shows that manufacturing fetched N91.2 billion or 30.9 per cent of total local non-import VAT.

A total N1.51 trillion VAT was generated between January and September, 40.2 per cent above N1.08 trillion in the same period in 2020 and 72.3 per cent higher than N876.1 billion in 2019.

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Further breakdown

A total N496.39 billion VAT was collection in Q1 2021, N512.25 billion (Q2 2021) and N500.49 billion (Q3 2021).

Last year, N324.58 billion VAT was collected in (Q1), N327.20 billion (Q2), and N424.71 billion (Q3).

“On a year-on-year basis, this upsurge shows growth rates of 52.93 per cent in quarter one 2021, 56.56 per cent in quarter two and 17.84 per cent in quarter three,” the NBS said.

The top VAT generators in Q3 2021 were

• Manufacturing – N91.2 billion (30.87per cent)
• Information and Communication – N59.3 billion (20.05 per cent)

• Mining & Quarrying – N28.4 billion (9.62per cent)
• Mining and quarrying – N24.44 billion

• Public administration – N27.2 billion
• Financial services – N23.9 billion

• Local Non-Import – N295.47 billion
• Foreign Non-Import – N81.25 billion

• Nigeria Customs Service (NCS)-Import – N123.76 billion

The least VAT sources were

• Extraterritorial organisations – N20.16 million
• Households as employers – N90.8 million 
• Water supply – N236.8 million

CIT revenue in Q3 2021

• Manufacturing – N64.48 billion (22.08 per cent)
• Information and communication – N58.15 billion (19.91 per cent)

• Mining and quarrying – N36.01 billion (12.33 per cent)

• Local CIT – N292.005 billion
• Foreign CIT – N180.51 billion

Nairametrics reports that Nigeria continues to ramp up efforts to increase non-oil revenue by increasing tax collection which has seen significant growth since VAT rate was raised from 5 per cent to 7.5 per cent in January 13, 2020.

It has become imperative for Abuja to diversify its revenue bucket, given uncertainty in crude oil revenue caused by high volatility in price, cut in production quota, and inability to meet production target.