The Federal Government’s revenue from Company Income Tax (CIT) declined by 12 percent in the first quarter of this year, new data has shown.
According to the National Bureau of Statistics (NBS) data, its revenue fell to N984.61 billion in Q1 from N1.13 trillion in Q4. On a year-on-year basis, it increased to 109 percent from N469 billion in Q1 2023.
“Local payments received were N386.49 billion, while Foreign CIT Payment contributed N598.13 billion in Q1 2024,” it disclosed.
Read also: Company income tax revenue hits record high in Q2, despite hurdles
The report disclosed that in Q1, the Mining and quarrying sector paid the highest tax of N80 billion, followed by financial and insurance activities with N72.4 billion and Information and communication with N48.5 billion.
In terms of growth rate, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the highest growth rate with 330.42 percent, followed by Administrative and support service activities with 33.18 percent, and Public administration and defence, compulsory social security with 24.6 percent.
CIT, also known as corporate tax, is a levy the government imposes on a company’s income.
The CIT rate is hinged on zero percent for companies with gross turnover of N25 million or less, 20 percent for companies with gross turnover greater than N25 million and less than N100 million, and 30 percent for large companies above N100 million.
Analysis of individual sectors
Mining and quarrying
The Mining and Quarrying sector, the largest contributor, increased its CIT contributions to N80.9 billion in the first three months of the year, up 21.3 percent from N66.7 billion the previous quarter.
Financial and insurance activities
The sector witnessed a 2.56 percent increase in its CIT contributions, rising to N72.4 billion in Q1 from N70.5 billion in the previous quarter.
Information and communication
The information and communication sector’s contribution to the federal government increased to N48.5 billion in the first quarter of the year. However, the sector paid 6.88 percent less in taxes compared to the N52.1 billion it paid in the previous quarter.
Manufacturing
In the year’s first quarter, company income tax from the manufacturing sector rose to N43.1 billion. However, manufacturers paid 70.4 percent less tax from N145.1 billion in the previous quarter.
“Manufacturers are not finding it easy with the high cost of production,” Abiodun Kayode-Alli, tax senior manager at PwC, said.
He said the state of the economy has impacted the amount they contribute to the government in terms of taxes. “Manufacturers pay a lot of taxes.”
He added that apart from the tough business environment, collection in Q1 is usually not much because most companies have till June 30 to complete filling and payments. “S0 they are properly waiting till that time to make payments.”
Public administration and defence, compulsory social security
The Public administration and defence, compulsory social Security increased its CIT contributions to N42.6 billion in the first three months of the year, up 24.5 percent from N34.2 billion the previous quarter.
Wholesale and retail trade, repair of motor vehicles and motorcycles
The Wholesale and retail trade, repair of motor vehicles and motorcycles sector’s contribution to the federal government rose to N16.1 billion in the first quarter of the year. However, the sector paid 39.7 percent less in taxes than the N26.7 billion it paid in the previous quarter.
Transportation and storage
In the year’s first quarter, company income tax from the Transportation and storage sector rose to N12.9 billion. However, transporters paid 45.5 percent less tax from N23.7 billion in the previous quarter.
Other service activities
The Other Service Activities sector contributed N11.4 billion in the first quarter, a 52.5 percent drop from N24.04 billion reported in the previous quarter.
The sector encompasses a broad range of services such as personal service, repair service, etc.
Professional, scientific and technical activities
The Professional, scientific, and technical activities contributed N11.2 billion in the first quarter, a 14.5 percent drop from N13.1 billion reported in the previous quarter.
Construction
The construction sector contributed N10.6 billion in the first quarter, a 32.9 percent drop from N15.8 billion reported in the previous quarter.
