Nigeria’s tax revenue from Company Income Tax (CIT) dropped to N984.6 billion in the first quarter of 2024, marking a 12.87% decline from the N1.13 trillion recorded in the previous quarter, per National Bureau of Statistics (NBS).
This decrease follows the departure of several multinational companies from the country due to harsh business environment, particularly the scarcity of foreign exchange.
Since President Bola Ahmed Tinubu assumed office, at least seven multinational corporations have left Nigeria, consequently leading to the drop in CIT collections.
The NBS report indicates that domestic CIT payments amounted to N386.49 billion, while foreign CIT contributions were N598.13 billion in Q1 2024.
On a quarterly basis, some sectors experienced significant fluctuations. Activities of households as employers, and undifferentiated goods and services-producing activities of households for own use, recorded the highest growth rate with -330.42% (N70.5 million), followed by administrative and support service activities with 33.18% (N6.7 billion).
Conversely, the manufacturing sector saw the steepest decline with -70.24% (N73.1 billion), followed by electricity, gas, steam, and air conditioning supply with a growth rate of 69.14% (N5.1 billion).
Sectoral contributions to CIT in Q1 2024 were led by mining and quarrying at 20.94% (N80.9 billion), financial and insurance activities at 18.73% (N72.4 billion), and information and communication at 12.56% (N48.5 billion). The smallest contributions came from activities of households as employers (0.02%), water supply, sewerage, waste management and remediation activities (0.07%), and extraterritorial organizations and bodies (0.24%).
Despite the quarterly decline, year-on-year CIT collections in Q1 2024 increased by 109.93% compared to Q1 2023.
In a separate report, the government realised N1.43 trillion from Value Added Tax (VAT) in Q1 2024, showing a 19.21% growth from N1.20 trillion in the previous quarter. Local VAT payments totalled N663.1 billion, while foreign VAT payments were N435.7 billion, and import VAT contributed N332 billion.
Accommodation and food service activities led the quarterly VAT growth rate with 59.15% (N11.4 billion), followed by administrative and support services with 47.79% (N9.4 billion). On the other end, extraterritorial organizations and bodies saw the lowest growth rate at -57.01% (N173.4 million), followed by human health and social work activities at -27.73% (N1 billion).
The manufacturing sector dominated VAT contributions in Q1 2024 with 26.72% (N177.1 billion), followed by information and communication with 17.42% (N115.5 billion), and mining and quarrying activities with 15.42% (N102.2 billion).
The significant shifts in tax revenues shows the challenges and the need for strategic economic adjustments to stabilise and grow Nigeria’s fiscal base.
Alleluia is the Assistant Editor and Content Writer at LagosPost.ng. She is a prolific writer and editor, she has written features and news stories on Lifestyle, Sports, Business, Politics and B2B marketing. She is also an event coordinator, host and social media content creator.
