Nigeria rakes in N5.3trn from VAT, company tax

The Federal Government generated N5.3 trillion from Value Added Tax (VAT) and Company Income Tax in 2022.

This represents a 42.14 per cent increase from the N3.76 trillion that was raised in 2021.

The National Bureau of Statistics (NBS) disclosed this in its latest tax report on VAT and CIT with figures provided by the Federal Inland Revenue Service.

A breakdown from the NBS report showed that the federal government raised N2.51 trillion from VAT and N2.83 trillion from CIT.

Nigerian law states that CIT is a 30 percent tax imposed on the profit of companies and VAT is a 7.5 per cent consumption tax paid when goods are purchased, and services rendered and borne by the final consumer.

According to the NBS, manufacturing, information and communication, and mining and quarrying sector were the largest contributors to local VAT.

For CIT, manufacturing, information and communication, and financial and insurance were the top three sectors that contributed to local CIT.

READ ALSO:Nigerian govt destroying businesses with excessive taxes —NECA

In 2022, the government received N477.43bn VAT from the manufacturing sector, N268.84bn VAT from the information and communication sector, and N158.49bn from the mining and quarrying sector.

It received N468.59bn CIT from the manufacturing sector, N362.26bn from the IT sector, and N208.93bn from the financial and insurance sector.

Commenting on the contribution of the sectors to VAT in the fourth quarter of 2022, the NBS said, “In terms of sectoral contributions, the top three largest shares in Q4 2022 were Manufacturing with 32.17 per cent; Information and communication with 18.05 per cent; and Public administration and defence, compulsory social security with 9.87 per cent.”

Commenting on CIT, it said, “In terms of sectoral contributions, the top three largest shares in Q4 2022 were Manufacturing with 31.20 per cent; Financial and insurance activities with 12.96 per cent; and Information and communication activities with 12.77 per cent.”

According to the Federal Government, its non-oil revenues were becoming more stable than oil revenue. It stated its intention to improve its non-oil revenue receipts by improving and expanding tax administrations.

In its ‘Public Presentation of 2023 FGN Budget Proposal — Breakdown and Highlights’ report, it said, “In addition, the tax system will be further strengthened over the medium term by improving collection efficiency, enhancing compliance, and reorganising the business practices of revenue agencies as well as employing appropriate technology.

“Furthermore, efforts will be made to bring more businesses in the informal sector into the tax”.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now