Nigeria’s Company Income Tax (CIT) collections rose by 73.14%, reaching N4.9 trillion in 2023, up from N2.83 trillion recorded in the previous year, according to data from the National Bureau of Statistics (NBS) unveiled these figures.
The 2023 CIT data includes Local CIT payments totalling N2.51 trillion and foreign CIT contributions amounting to N2.39 trillion, reflecting the broad-based growth across both domestic and international business operations.
The remarkable increase in CIT collections indicates a robust economic environment and improved compliance with tax obligations, highlighting the government’s efforts in tightening tax administration and expanding the tax net.
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Top Three Highest Paying Sectors
- The Manufacturing sector stands out with the highest CIT contribution of N626.4 billion, indicating a 34% increase from the N468.6 billion collected in 2022. Despite facing challenges such as high-interest rates, limited credit access, and an unstable power supply, the sector has shown resilience. Security issues, including insurgency and banditry, continue to pose threats, yet the sector’s growth trajectory remains strong.
- The Information & Communication sector follows closely, with a CIT contribution of N466.6 billion, marking a 29% growth from N362.26 billion in 2022. High data costs and inadequate infrastructure in remote areas are notable challenges, alongside growing concerns over cybersecurity threats such as data breaches and online scams. Despite these hurdles, the sector plays a crucial role in the digital transformation of Nigeria’s economy.
- Financial & Insurance Activities have also seen a remarkable increase, with CIT collections surging by 120% to N458.8 billion from N208.93 billion in 2022. This sector’s unprecedented growth may be attributed to FX revaluation gain that boost the profit of banks in 2023. Challenges such as non-performing loans and cybersecurity threats persist, emphasising the need for continued efforts in enhancing financial inclusion.
Top Three Lowest Paying Sectors
- On the other end of the spectrum, the activities of households as employers, and undifferentiated goods- and services-producing activities of households for own use, experienced a 23% annual growth in CIT payments, moving from N94.15 million in 2022 to N115.45 million in 2023.
- The Water supply, sewerage, waste management, and remediation activities sector saw a -15% decline in its CIT contributions, from N1.82 billion in 2022 to N1.54 billion in 2023, highlighting the operational and environmental challenges faced by this sector.
- Lastly, the activities of extraterritorial organisations and bodies reported a modest 9% increase in CIT payments, from N2.15 billion in 2022 to N2.33 billion in 2023, indicating a steady but slow growth in their financial contributions.
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