Nigeria’s Company Income Tax (CIT) collection surged by 226% in Q2, 2023

In the second quarter of 2023, the Company Income Tax (CIT) showed strong performance, collecting a total of N1.53 trillion. This is a remarkable increase of 226.40% compared to the previous quarter, Q1 2023, when N469.01 billion was collected. This data comes from the National Bureau of Statistics (NBS) and is provided by the Federal Inland Revenue Service (FIRS).

During the second quarter, N1.02 trillion came from local payments, while foreign CIT payments contributed N505.91 billion.

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.