Company Income Tax revenue rises 35% YoY
By Jeph Ajobaju, Chief Copy Editor
Company Income Tax (CIT) revenue rose 35.6 per cent Year-on-Year (YoY) to N532.48 billion in the first quarter ended March 2022 (Q1 2022) from N392.7 billion in Q1 2021.
The feat came through the renewed drive by Abuja to raise revenue from non-oil sources on the back of Finance Act 2021 which came into effect in January 2022, and through significant post Covid recovery.
The latest figures from the National Bureau of Statistics (NBS) show CIT grew 53.1 per cent Quarter-on-Quarter (QoQ) from N347.8 billion in Q4 2021.
Foreign CIT revenue amounted to N323.4 billion in Q1 2022 (60.7 per cent of total) and local CIT N209.1 billion (39.3 per cent).
Foreign CIT intake increased 263.5 per cent QoQ and 175.3 per cent YoY. Local CIT declined 19.2 per cent QoQ but increased 37.3 per cent YoY.
Financial experts have projected further rise in CIT collections riding on economic recovery, attributing the surge in Q1 2022 to extension of CIT to Non-Resident Companies (NRC) with significant presence in Nigeria.
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Input from offshore firms
Analysts at United Capital told Vanguard CIT revenue growth appears to show fruits of the amended CIT law in the 2021 Finance Act which came into effect in January 2022.
“In addition, they added, “it reflects sustained post-pandemic recovery in economic activities underpinned by stronger consumer demand. We remain bullish on CIT collections in FY 2022.
“The NRC coverage expansion continues to drive strong collections, softening the impact of weaker local CIT collections. In addition, we anticipate local collections will improve as the economy sustains the impressive growth it started the year with.”
Abuja partners CITN, other bodies to raise tax revenue
A partnership is being formed between the Chartered Institute of Taxation of Nigeria (CITN) and the federal government and other professional bodies to raise tax compliance levels nationwide.
“Our continuous collaboration with stakeholders at the state level is central to the successful execution of the mandate of the institute.
“Within the period under review, visits were made to nine states namely Oyo, Enugu, Edo, Borno, Akwa Ibom, Kebbi, Niger, Kwara and Kaduna States,” CITN President Adesina Adedayo said at the institute’s 30th annual general meeting in Lagos.
He disclosed that after his investiture, he led a delegation to visit Vice President Yemi Osinbajo.
“The highlights of the visit include our call to leadership by example by ensuring tax compliance and effective payment of taxes by those who aspire to political offices, implementation of the recommendations of the National Tax Policy; and the need for effective digitisation of the tax system,” he said.
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