Nigerian government earned more revenue from the Breweries, Bottling and Beverages, Professional Services inc Telecoms, State Ministries & Parastatals and Other Manufacturing sectors than their peers in the first quarter of 2021.
The four sectors remitted a combined Company Income Tax (CIT) of N75.03 billion in the three months ended March 2021. They accounted for 49.26 percent of the locally generated CIT of N152.33 billion.
Breakdown of the Company Income Tax by Sectors report by the National Bureau of Statistics ( NBS) showed that Breweries, Bottling and Beverages generated the highest amount of CIT with N23.26billion and was closely followed by Professional Services including Telecoms which generated N18.17billion. State Ministries & Parastatals generated N17.35billion.
The sectors’ contribution to the CIT generated in the review quarter was a key driver of the 14.84 percent increase in the locally generated CIT, from N132.64 billion in the first quarter of 2020, Nigerian companies in several sectors of the economy defied the impact of COVID-19 pandemic to remit N19.69 billion income tax more than they did in the comparable quarter of last year.
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Company income tax is a tax on the profits of registered companies in Nigeria. It also includes the tax on the profits of foreign companies carrying on any business in Nigeria. The CIT is paid by limited liability companies inclusive of the public limited liability companies.
The CIT is currently charged at the rate of 30 percent for large companies (that is companies having more than N100 million turnover), assessed on a preceding year basis (that is, tax is charged on profits for the accounting year ending in the year preceding assessment).
CIT is also charged at the rate of 20 percent for companies with a turnover between N25 million and N100 Million. The companies having less than N25 million turnover are not liable to pay company income tax in line with the Finance Act 2019.
Further breakdown of NBS data reflected that the sum of N392.77billion was generated as CIT (both locally and foreign) as against N295.72billion generated in Q4 2020 and N295.68billion generated in Q1 2020 representing 32.82percent increase Quarter- on Quarter and 32.84percent increase Year-on-year.
N184.59bn was generated as foreign CIT payment. The balance of N55.85bn was generated as CIT from other payments. “Foreign payments (CIT from foreign) are bulk payment from JP Morgan account which cannot be attributed to our offices or sectors.
Other payments- are payment through E-transact, E-tax pay, and remitta (GIFMIS),” NBS explained.
The total of the CIT generated in the review quarter is the highest Nigeria has reported since NBS started tracking the data in 2015. The total CIT value recorded in Q1 2021 was 130.81 percent higher the N170.17 billion reported some six years ago.
According to the Federal Inland Revenue Service (FIRS), resident companies are liable to corporate income tax on their worldwide income while non-residents are subject to CIT on their Nigeria-source income.
Other sectors of the Nigerian economy that also remitted some of the highest company income tax include Other Manufacturing with N16.25 billion, 14.98 percent higher than the CIT it generated for the government the year before. Oil Producing also made the list with a CIT of N15.36 billion, 38.56 percent and 62.74 percent higher than the previous quarter and year remittance, respectively.
Commercial and Trading also paid the government one of the biggest CIT at N13.49 billion.
Some of the sectors that remitted the lowest company income tax at below N100 million in the review quarter include Textile and Garment industry, Minning and Automobiles and Assemblies.
