Corporate income tax revenue is N532b

Corporate income tax revenue increases 35% year-on-year

By Jeph Ajobaju, Editor-in-Chief

Corporate Income Tax (CIT) revenue increased 35.6% year-on-year (YoY) to N532.48 billion in the first quarter ended March 2022 (Q1 2022), from N392, 7 billion naira in the first quarter of 2021.

The feat is due to Abuja’s renewed drive to increase revenue from non-oil sources on the back of the 2021 Finance Bill which came into force in January 2022, and thanks to a significant post-Covid recovery.

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Latest figures from the National Bureau of Statistics (NBS) show that the CIT increased by 53.1% quarter-on-quarter (QT) from N347.8 billion in the fourth quarter of 2021.

Foreign CIT revenue was N323.4 billion in the first quarter of 2022 (60.7% of the total) and local CIT revenue was N209.1 billion (39.3%).

Foreign CIT inflow increased 263.5% quarter-on-quarter and 175.3% year-on-year. Local CIT decreased 19.2% quarter-on-quarter, but increased 37.3% year-on-year.

Financial experts have forecast a further increase in CIT recoveries on the back of the economic recovery, attributing the rise in the first quarter of 2022 to the extension of CIT to non-resident companies (NRCs) with a significant presence in Nigeria.

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Contribution of offshore companies

United Capital analysts said Avant-garde The growth in CIT revenues appears to be bearing fruit from the amended CIT law in the 2021 finance law which came into force in January 2022.

“Furthermore, they added, “it reflects a sustained post-pandemic recovery in economic activities supported by stronger consumer demand. We remain optimistic about CIT’s collections for fiscal year 2022.

“Expanding NRC coverage continues to drive strong recoveries, mitigating the impact of weaker local CIT recoveries. Additionally, we expect local collections to improve as the economy maintains the impressive growth it started the year with.

Abuja partners with CITN and other bodies to increase tax revenue

A partnership is being formed between the Chartered Institute of Taxation of Nigeria (CITN) and the Federal Government and other professional bodies to raise tax compliance levels nationwide.

“Our continued collaboration with stakeholders at the state level is critical to the successful execution of the institute’s mandate.

“During the reporting period, visits were made to nine states, namely Oyo, Enugu, Edo, Borno, Akwa Ibom, Kebbi, Niger, Kwara and of Kaduna,” CITN President Adesina Adedayo said at the institute’s 30th Annual General Meeting in Lagos.

He revealed that after his inauguration, he led a delegation to visit Vice President Yemi Osinbajo.

“Highlights of the visit include our call for leadership by example in ensuring tax compliance and the effective payment of taxes by those who aspire to political office; the implementation of national tax policy recommendations; and the need for effective digitization of the tax system,” he said.

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