Economic Downturn: Federal Govt Earnings From Company Tax Drops By 37% In Q1

Following a downturn of economic activities in the first three months of the year due to the scarcity of cash in the country, government earnings from Company Income Tax (CIT) for the first quarter of the year dipped by 37.79 per cent.

Latest data released by the National Bureau of Statistics showed that on the aggregate CIT for Q1 2023 was reported at N469.01 billion, as against N753.88 billion that was reported in the last three months of 2022.

Data showed that local payments received were N300.78 billion, while Foreign CIT Payment contributed N168.23 billion in Q1 2023. On a quarter-on-quarter basis, the financial and insurance activities recorded the highest growth rate with 50.42 per cent, followed by construction with 42.32 per cent.

On the other hand, water supply, sewerage, waste management, and remediation activities had the lowest growth rate with – 69.38 per cent followed by other service activities with -60.13per cent. In terms of sectoral contributions, the top three largest shares in Q1 2023 were financial & insurance activities with 22.94 per cent; manufacturing with 20.91 per cent; and information and communication with 11.89per cent.

Conversely, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.01per cent, followed by water supply, sewerage, waste management, and remediation activities with 0.04per cent; and activities of extraterritorial organizations and bodies with 0.12per cent. However, on a year-on-year basis, CIT collections in Q1 2023 decreased by 14.96per cent from Q1 2022.

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Meanwhile, aggregate Value Added Tax (VAT) for Q1 2023 was reported at N709.59 billion, showing a growth rate of 1.75per cent on a quarter-on-quarter basis from N697.38 billion in Q4 2022. Data from NBS showed that local payments recorded were N436.10 billion, Foreign VAT Payments were N151.13 billion, while import VAT contributed N122.37 billion in Q1 2023.

On a quarter-on-quarter basis, the activities of households as employers, undifferentiated goods- and services producing activities of households for own use recorded the highest growth rate with 349.86per cent, followed by construction with 95.64per cent.

On the other hand, activities of extraterritorial organizations and bodies had the lowest growth rate with –53.54per cent, followed by real estate activities with –47.01per cent. In terms of sectoral contributions, the top three largest shares in Q1 2023 were manufacturing with 29.65per cent; information and communication with 19.29per cent; and mining & quarrying with 12.24per cent.

Conversely, activities of extraterritorial organizations and bodies recorded the least share with 0.02per cent, followed by activities of households as employers, undifferentiated goods- and services-producing activities of households for own use with 0.03per cent; and water supply, sewerage, waste management, and remediation activities with 0.04per cent. However, on a year-on-year basis, VAT collections in Q1 2023 increased by 20.56per cent from Q1 2022.