Nigeria generated N1.18 trillion from Company Income Tax (CIT) and Value Added Tax (VAT) at the end of the first quarter of 2023, representing an increase of 3.37 percent over N1.14 trillion realized from both revenue sources as of March 2022. VAT contributed 60.2 percent of the total earnings from both revenue sources.
In terms of the performance of each revenue source relative to the comparable period in 2022, the nation recorded mixed results from both income sources. Revenue from CIT declined by 15 percent at the end of the first quarter of 2023 to N469 billion in contrast to N551.53 billion as of March 2022.
CIT comes from two major sources which are local CIT and foreign CIT. As of March 2023, Nigeria generated N300.78 billion from local CIT, which amounted to an increase of 43.8 percent when compared to N209.13 billion made from local CIT as of March 2022.
On the other hand, foreign CIT stood at N168.23 billion at the end of the first quarter of 2023 in contrast to N342.4 billion as of March 2022, amounting to a decrease of 50.9 percent.
“In terms of sectoral contributions, the top three largest shares in Q1 2023 were financial & insurance activities with 22.94%; manufacturing with 20.91%; and information and communication with 11.89%.
“Conversely, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.01%, followed by water supply, sewerage, waste management, and remediation activities with 0.04%; and activities of extraterritorial organizations and bodies with 0.12%,” the NBS stated.
VAT revenue rose on a quarter-on-quarter basis, and on a year-on-year basis. With N709.59 billion generated at the end of the first three months of this year, Nigeria’s VAT revenue recorded an increase of 1.75 percent over N697.37 billion realized at the end of the fourth quarter of 2022, and by an increase of 20.6 percent when compared to N588.6 billion that was generated at the end of the first quarter of 2022.
“The activities of households as employers, undifferentiated goods- and services producing activities of households for own use recorded the highest growth rate with 349.86%, followed by construction with 95.64%.
“On the other hand, activities of extraterritorial organizations and bodies had the lowest growth rate with –53.54%, followed by real estate activities with –47.01%. In terms of sectoral contributions, the top three largest shares in Q1 2023 were manufacturing with 29.65%; information and communication with 19.29%; and mining & quarrying with 12.24%,” according to a statement by the NBS.
Nigeria aims to bolster the finances of states and local government areas with increased VAT revenue generation in order to minimize the impact of COVID 19 on their financial well-being.
