In the second quarter of 2023, Company Income Tax (CIT) reported robust performance, posting a total collection of N1.53 trillion.
This remarkable figure signifies a substantial quarter-on-quarter growth rate of 226.40%, surging from N469.01 billion recorded in the preceding quarter, Q1 2023.
This is according to data published by the National Bureau of Statistics (NBS) supplied by the Federal Inland Revenue Service (FIRS).
For the second quarter, local payments accounted for N1.02 trillion, while Foreign CIT Payment contributed N505.91 billion during Q2 2023.
Sectoral Growth Rates
When analysed according to the various sectors, it is evident that water supply, sewerage, waste management, and remediation activities displayed the most striking growth rate of 626.52% on a quarter-on-quarter basis, followed closely by accommodation and food service activities, which registered an impressive growth rate of 585.11%.
In stark contrast, the education sector recorded the lowest growth rate at -15.48%, with public administration and defence, and compulsory social security trailing at 25.46%.
Sectoral Contributions
Breaking down the sectoral contributions to CIT collections in Q2 2023, the manufacturing sector emerged as the leader, accounting for the lion’s share at 25.63%.
The financial and insurance activities sector closely followed with a significant contribution of 24.47%, while the information and communication sector rounded out the top three with a substantial 20.30% share.
In contrast, some sectors played a more modest role in CIT collections during this period.
Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use made the least significant contribution, constituting a mere 0.01%.
Activities of extraterritorial organizations and bodies, with 0.06%, and water supply, sewerage, waste management, and remediation activities, with 0.09%, also held relatively small shares.
Year-on-Year Comparison
In a year-on-year perspective, CIT collections in Q2 2023 displayed remarkable growth, surging by an impressive 114.28% compared to Q2 2022, underscoring the resilience and dynamism of the tax revenue landscape.
What you should know
The Federal Inland Revenue Service (FIRS) in the first quarter of 2023 reported a revenue collection figure of N5.5 trillion which is a record for the agency. For the year 2022, the agency generated revenues of N10.1 trillion.
The Federal government has voiced its move to consolidate all tax collection activities in the FIRS.
The FG hopes to increase revenues from taxes and close the tax gap which it estimates to be in the region of N20 trillion according to the Chair of the Presidential Committee on Fiscal and Tax Reforms.
