Companies Pay N11.5tn Tax Within 7years – NBS

Companies Pay N11.5tn Tax Within 7years – NBS

By Mariam Sanni

Data from the Company Income Tax reports published by the National Bureau of Statistics has revealed that the Federal Government has raked in N11.5tn from taxes paid by business organizations under the present administration.

According to the report, between 2015 and 2022 showed CIT collected by the Federal Inland Revenue Service stood at N1.3tn when the President assumed office in 2015 and dipped by 26 per cent to N1tn in 2016 when the country’s economy went into recession due a significant drop in oil prices.

It maintained an upward trajectory between 2017 and 2020, as the government generated a total of N5.3tn during this period.

Companies Income Tax is a tax on the profits of incorporated entities in Nigeria. It also includes the tax on the profits of non-resident companies carrying on business in Nigeria. The tax is paid by limited liability companies inclusive of the public limited liability companies. It is commonly referred to as a corporate tax.

The CIT rate is 30 per cent for large companies (i.e. companies with gross turnover greater than NGN 100m), assessed on a preceding year basis (i.e. tax is charged on profits for the accounting year ending in the year preceding assessment).

The Federal Government earned N1.6tn from corporate tax in 2021 and made a record N2tn revenue from CIT in the three quarters of last year.

According to the data, the highest contributors to the CIT were the manufacturing, Information Communication Technology and financial services sectors.

Also a critical evaluation of 2022’s Company Income Tax records showed a significant hike in taxes paid by companies across the board.

Also, tax from firms in the information and communication sector rose by 158.51 per cent from N51.05bn in the third quarter of 2021 to N131.97bn in the corresponding period in 2022.

In the same vein, manufacturers paid the most taxes during the period in review, as the Federal Government increased the number of taxes collectable by the Federal Inland Revenue Services from 39 to 61 items.

Some of the new taxes as contained in the schedule to the taxes and levies (Approved list for collection) Act (Amendment Order), 2015, include “national information technology development levy, economic development levy, environmental (ecological) fee or levy; inter-state road taxes; mining, milling and quarrying fee; infrastructure maintenance charge; social services contribution tax, and wharf landing fee where applicable.

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