The federal government’s Company Income Tax (CIT) collection in the second quarter of 2024 rose by 150.83% to N2.47 trillion.
In the first three months of the year, CIT collection stood at N984.61 billion.
This is according to the CIT collection data for the second quarter of the year published by the National Bureau of Statistics (NBS).
According to the report, local payments in the period under review amounted to N1.35 trillion, while foreign CIT payments contributed N1.12 trillion. On a quarter-on-quarter basis, the agriculture, forestry, and fishing sectors exhibited the highest growth rate at 474.50%, followed by financial and insurance activities at 429.76%, and manufacturing at 414.15%.
On the other hand, the lowest growth rate was observed in household activities as employers and undifferentiated goods- and services-producing activities for own use, which recorded a decline of –30.22%, followed by extraterritorial organizations and bodies with a decrease of –15.67%.
Sectoral contribution to CIT payment
In Q2 2024, the top three sectors contributing the largest shares were financial and insurance activities at 15.53%, manufacturing at 8.99%, and information and communication at 7.84%.
In contrast, household activities as employers and undifferentiated goods- and services-producing activities for own use had the smallest share at 0.00%, followed by water supply, sewerage, waste management, and remediation activities at 0.02%, and extraterritorial organizations and bodies at 0.03%.
On a year-on-year basis, CIT collections in Q2 2024 rose by 59.52% compared to the N1.55 trillion recorded in Q2 2023.
Increase in CIT collection in Q2
In the first quarter of the year, CIT collection declined by 12.87% when compared to the fourth quarter of 2024. Analysts then attributed the decline to the nation’s ongoing macroeconomic challenges, including high inflation, exchange rate instability, rising input costs, and other related factors.
However, the spike in CIT collection in Q2 was mainly propelled by a rise in foreign Company Income Tax (CIT) payments which increased by 87.24% to N1.11 trillion when compared to Q1, 2024 and more than doubled when compared to the corresponding period of last year.
However, it has been observed that there has been a consistent rise in CIT collection in the second quarter of the year dating back to Q2, 2021.
About CIT payments in Nigeria
- The CIT rate for large companies, defined as those with a gross turnover exceeding 100 million Nigerian naira (NGN), is set at 30%, assessed on a preceding year basis—meaning tax is levied on profits earned during the previous accounting year.
- For companies with a gross turnover of NGN 25 million or less, the CIT rate is 0%. Companies with a gross turnover between NGN 25 million and NGN 100 million are subject to a 20% CIT rate.
- The Federal Inland Revenue Service (FIRS) is responsible for CIT collection in Nigeria.
