…as CIT slumps by 14.96%
Revenue generated by the federal government through value added tax (VAT) in the first quarter 2023 rose from N600.15 billion generated during the same period in 2022 to N709.59 billion. This is an increase of 20.56 percent.
Value Added Tax is a consumption tax imposed on consumer goods and services.
National Bureau of Statistics (NBS) which reported this in its first quarter 2023 VAT report also informed that company income tax (CIT) for the first quarter 2023 fell by 14.96 percent, from N551.53 billion in first quarter 2022 to N469.009 billion in the same period in 2023.
This drop in CIT may have been caused by the reduction in Nigeria’s economic growth in Q1 2023, which has been attributed to the negative consequences of the naira redesign policy of the Central Bank of Nigeria (CBN). This is because so many companies lacked the cash to make transactions in vital parts of the informal chain.
NBS said on a quarter-on-quarter basis, VAT growth rate was 1.75 percent from N697.38 billion in Q4 2022. It said local payments recorded were N436.10 billion, foreign VAT payments were N151.13 billion, while import VAT contributed N122.37 billion during the period. According to NBS, on a quarter-on-quarter basis, 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 percent, followed by construction with 95.64 percent.
It however noted that the activities of extraterritorial organizations and bodies had the lowest growth rate with –53.54 percent, followed by real estate activities with –47.01 percent.
In terms of sectoral contributions, the top three largest shares in Q1 2023 were manufacturing with 29.65 percent; information and communication with 19.29 percent; and mining & quarrying with 12.24 percent.
“Conversely,” it said, “activities of extraterritorial organizations and bodies recorded the least share with 0.02 percent, followed by activities of households as employers, undifferentiated goods- and services-producing activities of households for own use with 0.03 percent; and water supply, sewerage, waste management, and remediation activities with 0.04 percent.”
Meanwhile the NBS reports that on the aggregate, Company Income Tax (CIT) for Q1 2023 was reported at N469.01 billion, indicating a negative growth rate of -37.79 percent on a quarter-on-quarter basis from N753.88 billion in Q4 2022.
Local payments received were N300.78 billion, while fjnjoreign CIT payment contributed only N168.23 billion during the period.
On a quarter-on-quarter basis, the financial and insurance activities recorded the highest growth rate with 50.42 percent, followed by construction with 42.32 percent.
On the other hand, water supply, sewerage, waste management, and remediation activities had the lowest growth rate with – 69.38 per cent, followed by other service activities with -60.13 percent.
In terms of sectoral contributions, the top three largest shares in Q1 2023 were financial & insurance activities with 22.94 percent; manufacturing with 20.91 percent; and information and communication with 11.89 percent.
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 percent, followed by water supply, sewerage, waste management, and remediation activities with 0.04 percent; and activities of extraterritorial organizations and bodies with 0.12 percent.