Nigeria has generated a total of N7.8 trillion from company income tax (CIT) from January 2015 till end of last quarter (Q3 2020), an analysis of relevant data has shown.
Nigerian resident companies are liable to CIT on their global income while non-resident (foreign) companies are required to pay CIT on their Nigeria-source incomes.
The breakdown of the tax earnings for the period shows that N4.08 trillion (an equivalent of 52 per cent) was received from local companies while N3.05 trillion (or 39 per cent) was the contribution of non-resident companies.
The balance, N692.2 billion, or nine per cent of the bulk, came from other sources such as e-Transact and the Government Integrated Financial Management Information System (GIFMIS). On average, the country earned N1.3 trillion per annum from CIT in the past six-year period.
In the first three quarters of 2020, the country generated approximately N1.1 trillion as against N1.3 trillion generated in the corresponding period of 2020. This year’s first nine-month CTI revenue is about N200 billion short of the amount generated in the corresponding period in 2019.
The third-quarter report released by the National Bureau of Statistics last Thursday showed that the country generated 416.01 in the last quarters (Q3 2020) compared to N402.03 billion recorded in the previous quarter (Q2 2020). The Q3 figure contracted by 20.13 per cent compared to N520.89 billion recorded in the corresponding quarter (Q3) of 2019.
Out of the N4.08 trillion CIT realised from local companies , The Guardian’s analysis showed that a whopping 18 per cent, translating to N741.3 billion, was realised from banks and other financial institutions, a sector that contributes less than three per cent to the country’s Gross Domestic Product (GDP).
With N933.5 billion, professional services (including telecommunications) contributed the lion’s share to the total local CIT generated in the period. Telecommunication, the major component of the professional service category, controls 11.2 per cent of the country’s GDP.
Professional services, financial institutions and breweries add less than 20 per cent to the GDP. Yet, their revenue contribution is huge. They generated over 50 per cent of total CIT paid by resident companies from 2015 till date.
On the flip side, about N28.4 billion, which was less than one per cent of the local CIT revenue, came from agriculture. Interestingly, the sector sits on 30.8 per cent of the country’s GDP.
Reacting to the imbalances resulting from the official figures, Head of Tax (West Africa), Ernst & Young, Akinbiyi Abudu, said agriculture and manufacturing, especially those involved in exports, get some incentives. Hence, they have a light tax burden. He said the authority might not be able to do much to make agriculture and manufacturing pay higher, as the incentive was vital to developing the much-needed productive sector.
Critical areas of the non-oil sector, like agriculture and manufacturing, are entitled to fiscal incentives – a reason their inputs to tax revenue are negligible. Yet, some stakeholders have argued that the reign of informal operators in the industries is a major revenue leakage.
But Abudu said, “there is little the country can gain in terms of revenue, even if all the operators are added” to the formal space. His argument was that the operators are smallholders who would still not pay significant amounts when they are officially recognised as business entities.
“The only people that pay taxes are salary earners in the former sector and businesses. The larger percentage of the population is not paying taxes – small business owners, especially. There is a limit to how much juice you can squeeze from an orange. The government should visit transactions where taxes are not paid. Otherwise, we would not make significant progress,” he said.
But Bala Zakka, a chartered tax adviser and public analyst, said government has many options to review in its efforts to boost tax revenue. He faulted the blanket classification of businesses into the industry for the purpose of administering incentives and tax assessments. He said some businesses impose extortionist charges while they use special services to deny government accruable tax revenues.
“We must begin to think around how the business operators could be fairly and equitably re-classified. A hospital operating at certain level of financial scale could be removed from the health service category. Some schools charge several millions of naira as tuition per session while they continue to hide under the cloak of education service. We must begin to look at this going forward,” he said.
According to Zakka, a classification system that is strictly based on turnover is more equitable. He also faulted profit-based assessment, saying smart business executives would continue to exploit the weakness to rob government.
CIT is paid according to size, scale and industry. Analysts said government has a responsibility to use fiscal incentives and policies to nurture but that it cannot with the same breadth expose any sector to harsh operational climate.
The discordance between the weight of GDP of key sectors and their contributions to the country’s revenue drive is as old as the country’s modern economy. The challenge, which many experts said is entrenched and structural, is widespread, manifesting in tax revenue, foreign exchange earnings and others.
Zakka, described the challenge as a sign of an economy lacking in breadth and depth. And until the issues are addressed, he said, the economy would continue to face major distortion at the slightest panic in the non-productive sectors like oil.
Meanwhile, President of the Chartered Institute of Taxation of Nigeria (CITN), Dame Gladys Simplice, said the economy contracted (as in the previous experiences) because the government did not invest past earnings, including tax proceeds, in critical infrastructure that would have supported the growth of the real sector. She said the economic downturn has nothing to do with tax evasion.
“If we invested the money we earned into areas that would support sustainable economic growth, we would not be going into recession each time there is a problem in the oil market. But the government failed to do the basic things, making the cost of production unbearable. This is the same reason companies are closing. This is the real cause of the recession,” she said.
Recall that Secretary to Government of the Federation (SGF), Boss Mustapha, had at a workshop in Abuja, blamed failure of citizens to fulfill their tax obligations as major reason for the current downturn.
But Simplice argued the tax deficit in the country is fuelled by “trust issue”, adding that every Nigerian pays forms of indirect taxes daily because the government has not lived up to expectations in providing power, quality education, roads and healthcare.
She, however, said a tax reform that is more consumption-based and lenient with producers is required without prejudice to the call on the authority to proceed to where it matters.
A cut in CIT and increase in value added tax (VAT) to 10 per cent, according to her, would reduce the cost of production, make the locally- produced goods more competitive and increase productive capacity.
The tax expert objected that a further hike in VAT, less than a year after a similar action, would have an adverse impact on the poor, stressing that “essential commodities and services” are not ‘VATed’.
Her proposal, she said, was a necessary step the government must take to redistribute incomes in favour of the poor, as “luxury items that are included on VAT list” are mostly consumed by the rich. She also urged the government to reform the system to enable tax inheritance and upscale property to reduce the huge income gap.
“Imagine the difference it would make if the unrented property in Ikoyi and other rich neighbourhoods are taxed? How many states have inheritance taxes? We must begin to look at these areas instead of taxing production to death. We can also increase the VAT base. This is a way to think outside the box,” the CITN noted.
Notwithstanding the concern about plummeting tax revenues, Nigeria has recorded improvement in recent times. Despite the impact on COVID-19 on businesses and transactions, for instance, the country realised N1.08 trillion from VAT in the first three quarters of the year as against N876.1 billion realised in the corresponding period last year. The significant improvement, experts suggested, was from VAT increase infective from last February.
The domestic economy had relied on oil and gas, a sector with a weighted contribution of less than 9 per cent to the value of the country’s production, for survival. Hence, growth retreats each time there is a crisis in the market, throwing manufacturing and service industries into panicky cost optimisation gambits that often lead to job losses. (The Guardian)
About the Author
361027 597995Thanks for sharing superb informations. Your site is so cool. 764965
853793 584866Greetings! Quick question thats completely off subject. Do you know how to make your site mobile friendly? My weblog looks weird when viewing from my iphone. Im trying to find a template or plugin that might be able to fix this difficulty. Should you have any recommendations, please share. Appreciate it! 719570
Hmm it seems like your site ate my first comment (it was extremely long) so I guess I’ll just sum it up what I submitted and say, I’m thoroughly enjoying your blog. I as well am an aspiring blog blogger but I’m still new to the whole thing. Do you have any points for beginner blog writers? I’d certainly appreciate it.
Hey there just wanted to give you a quick heads up and let you know a few of the images aren’t loading correctly. I’m not sure why but I think its a linking issue. I’ve tried it in two different internet browsers and both show the same results.
справки
Amazing blog! Do you have any suggestions for aspiring writers? I’m planning to start my own site soon but I’m a little lost on everything. Would you suggest starting with a free platform like WordPress or go for a paid option? There are so many choices out there that I’m totally confused .. Any recommendations? Thanks a lot!
Hey there! I just wanted to ask if you ever have any trouble with hackers? My last blog (wordpress) was hacked and I ended up losing a few months of hard work due to no data backup. Do you have any solutions to protect against hackers?
Hello just wanted to give you a quick heads up. The text in your post seem to be running off the screen in Chrome. I’m not sure if this is a format issue or something to do with web browser compatibility but I thought I’d post to let you know. The layout look great though! Hope you get the problem resolved soon. Many thanks
Hey are using WordPress for your blog platform? I’m new to the blog world but I’m trying to get started and create my own. Do you need any coding knowledge to make your own blog? Any help would be greatly appreciated!
I’m gone to tell my little brother, that he should also go to see this website on regular basis to get updated from latest gossip.
What a data of un-ambiguity and preserveness of precious knowledge regarding unexpected feelings.
I’m gone to tell my little brother, that he should also visit this webpage on regular basis to take updated from newest news.
Greate pieces. Keep writing such kind of information on your page. Im really impressed by your site.
obviously like your website however you need to check the spelling on quite a few of your posts. A number of them are rife with spelling problems and I in finding it very bothersome to tell the truth on the other hand I will certainly come back again.
Very soon this web site will be famous among all blogging and site-building viewers, due to it’s nice posts
Thanks for a marvelous posting! I actually enjoyed reading it, you could be a great author.I will ensure that I bookmark your blog and will eventually come back at some point. I want to encourage yourself to continue your great posts, have a nice weekend!
Thank you for the auspicious writeup. It actually was a leisure account it. Glance complicated to far added agreeable from you! By the way, how can we keep up a correspondence?
Appreciating the commitment you put into your site and in depth information you provide. It’s great to come across a blog every once in a while that isn’t the same unwanted rehashed material. Wonderful read! I’ve saved your site and I’m including your RSS feeds to my Google account.
I needed to thank you for this great read!! I definitely enjoyed every little bit of it. I have you book-marked to check out new stuff you post
Howdy exceptional blog! Does running a blog similar to this take a massive amount work? I have very little expertise in computer programming but I was hoping to start my own blog soon. Anyways, if you have any suggestions or tips for new blog owners please share. I know this is off topic nevertheless I just needed to ask. Cheers!
Wonderful web site. Lots of useful information here. I’m sending it to some pals ans also sharing in delicious. And naturally, thank you on your effort!
Great post.
constantly i used to read smaller articles which also clear their motive, and that is also happening with this post which I am reading here.
Good day! This is my 1st comment here so I just wanted to give a quick shout out and tell you I truly enjoy reading through your articles. Can you suggest any other blogs/websites/forums that deal with the same subjects? Thanks!
Hello! This is my first visit to your blog! We are a group of volunteers and starting a new initiative in a community in the same niche. Your blog provided us useful information to work on. You have done a marvellous job!
Thank you, I have recently been searching for information approximately this topic for ages and yours is the best I have found out so far. However, what about the conclusion? Are you sure concerning the source?
Hi I am so excited I found your weblog, I really found you by error, while I was researching on Aol for something else, Nonetheless I am here now and would just like to say thanks a lot for a marvelous post and a all round interesting blog (I also love the theme/design), I dont have time to look over it all at the minute but I have saved it and also added in your RSS feeds, so when I have time I will be back to read a lot more, Please do keep up the awesome b.
I think what you postedwrotethink what you postedtypedbelieve what you postedtypedsaidbelieve what you postedwroteWhat you postedtypedsaid was very logicala bunch of sense. But, what about this?consider this, what if you were to write a killer headlinetitle?content?wrote a catchier title? I ain’t saying your content isn’t good.ain’t saying your content isn’t gooddon’t want to tell you how to run your blog, but what if you added a titleheadlinetitle that grabbed people’s attention?maybe get people’s attention?want more? I mean %BLOG_TITLE% is a little plain. You might look at Yahoo’s home page and watch how they createwrite post headlines to get viewers interested. You might add a related video or a related pic or two to get readers interested about what you’ve written. Just my opinion, it might bring your postsblog a little livelier.
I loved as much as you will receive carried out right here. The sketch is tasteful, your authored subject matter stylish. nonetheless, you command get bought an impatience over that you wish be delivering the following. unwell unquestionably come further formerly again since exactly the same nearly a lot often inside case you shield this increase.
Spot on with this write-up, I honestly feel this website needs much more attention. I’ll probably be back again to read more, thanks for the info!
Fantastic beat ! I wish to apprentice while you amend your web site, how can i subscribe for a blog site? The account aided me a acceptable deal. I had been tiny bit acquainted of this your broadcast provided bright clear concept
Thank you for the auspicious writeup. It in fact was a amusement account it. Glance complex to far introduced agreeable from you! By the way, how can we keep in touch?
Hi there I am so excited I found your web site, I really found you by error, while I was searching on Bing for something else, Nonetheless I am here now and would just like to say kudos for a marvelous post and a all round thrilling blog (I also love the theme/design), I dont have time to read through it all at the minute but I have book-marked it and also added in your RSS feeds, so when I have time I will be back to read much more, Please do keep up the fantastic b.
When someone writes an piece of writing he/she keeps the thought of a user in his/her mind that how a user can know it. Thus that’s why this article is great. Thanks!
wonderful issues altogether, you just won a emblem new reader. What could you suggest in regards to your post that you simply made a few days ago? Any sure?
Красивый частный эротический массаж в Москве в spa
Wow, this article is pleasant, my sister is analyzing such things, thus I am going to tell her.
Pretty section of content. I just stumbled upon your blog and in accession capital to assert that I acquire in fact enjoyed account your blog posts. Any way I’ll be subscribing to your augment and even I achievement you access consistently rapidly.
Keep on working, great job!
Hi, I think your website might be having browser compatibility issues. When I look at your blog in Ie, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, amazing blog!
I was wondering if you ever considered changing the page layout of your site? Its very well written; I love what youve got to say. But maybe you could a little more in the way of content so people could connect with it better. Youve got an awful lot of text for only having one or two images. Maybe you could space it out better?
What’s up, constantly i used to check website posts here early in the morning, as i love to learn more and more.
Wow, that’s what I was looking for, what a stuff! present here at this blog, thanks admin of this site.
Appreciate the recommendation. Will try it out.
Outstanding quest there. What occurred after? Good luck!
This post is truly a pleasant one it helps new internet viewers, who are wishing for blogging.
I am really happy to read this webpage posts which contains lots of helpful data, thanks for providing such data.
I wanted to thank you for this wonderful read!! I certainly enjoyed every little bit of it. I have you book marked to check out new stuff you post
Asking questions are actually nice thing if you are not understanding anything completely, except this article provides pleasant understanding even.
Hi there, I found your blog via Google at the same time as searching for a similar topic, your site got here up, it seems good. I have bookmarked it in my google bookmarks.
Keep on working, great job!
Howdy this is somewhat of off topic but I was wondering if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding know-how so I wanted to get advice from someone with experience. Any help would be greatly appreciated!
Inspiring quest there. What occurred after? Thanks!
Hi there, I check your blogs regularly. Your story-telling style is awesome, keep up the good work!
I think what you postedtypedbelieve what you postedwrotesaidthink what you postedtypedbelieve what you postedwrotesaidWhat you postedtypedsaid was very logicala ton of sense. But, what about this?think about this, what if you were to write a killer headlinetitle?content?typed a catchier title? I ain’t saying your content isn’t good.ain’t saying your content isn’t gooddon’t want to tell you how to run your blog, but what if you added a titlesomethingheadlinetitle that grabbed people’s attention?maybe get a person’s attention?want more? I mean %BLOG_TITLE% is a little vanilla. You might look at Yahoo’s home page and watch how they createwrite post headlines to get viewers interested. You might add a related video or a related picture or two to get readers interested about what you’ve written. Just my opinion, it might bring your postsblog a little livelier.
Ahaa, its good conversation concerning this piece of writing here at this website, I have read all that, so now me also commenting here.
I think this is one of the most important information for me. And i’m glad reading your article. But wanna remark on few general things, The website style is perfect, the articles is really excellent : D. Good job, cheers
I’m not sure where you are getting your info, but good topic. I needs to spend some time learning more or understanding more. Thanks for fantastic information I was looking for this information for my mission.
I was wondering if you ever considered changing the page layout of your site? Its very well written; I love what youve got to say. But maybe you could a little more in the way of content so people could connect with it better. Youve got an awful lot of text for only having one or two images. Maybe you could space it out better?
What’s up i am kavin, its my first time to commenting anywhere, when i read this piece of writing i thought i could also make comment due to this brilliant post.
What’s up, after reading this awesome post i am also cheerful to share my familiarity here with mates.
Great post.
You really make it seem so easy together with your presentation however I in finding this topic to be really something which I think I would never understand. It kind of feels too complicated and very large for me. I am taking a look forward in your next publish, I will try to get the grasp of it!
Hi to all, as I am in fact keen of reading this webpage’s post to be updated daily. It contains nice information.
Its like you read my mind! You seem to know so much about this, like you wrote the book in it or something. I think that you could do with some pics to drive the message home a bit, but other than that, this is fantastic blog. A great read. I’ll definitely be back.
These are in fact enormous ideas in about blogging. You have touched some good points here. Any way keep up wrinting.
Heya i’m for the first time here. I came across this board and I find It truly useful & it helped me out a lot. I hope to give something back and help others like you helped me.
This website was… how do I say it? Relevant!! Finally I have found something that helped me. Thank you!
Helpful info. Fortunate me I found your web site by chance, and I am surprised why this twist of fate did not came about in advance! I bookmarked it.
What’s up, this weekend is nice for me, because this point in time i am reading this enormous informative piece of writing here at my home.
A person necessarily help to make critically articles I would state. This is the first time I frequented your web page and to this point? I amazed with the research you made to create this actual post amazing. Magnificent task!
What’s up, its nice post regarding media print, we all understand media is a great source of information.
Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point. You definitely know what youre talking about, why waste your intelligence on just posting videos to your site when you could be giving us something enlightening to read?
Hey I know this is off topic but I was wondering if you knew of any widgets I could add to my blog that automatically tweet my newest twitter updates. I’ve been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this. Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.
It’s going to be end of mine day, except before end I am reading this wonderful piece of writing to increase my experience.
I read this article fully concerning the resemblance of latest and preceding technologies, it’s awesome article.
Вы ищете надежное и захватывающее онлайн-казино, тогда это идеальное место для вас!
I love it when people come together and share views. Great website, continue the good work!
What’s up, yup this post is truly good and I have learned lot of things from it regarding blogging. thanks.
Добро пожаловать на сайт онлайн казино, мы предлагаем уникальный опыт для любителей азартных игр.
It’s very straightforward to find out any topic on net as compared to books, as I found this article at this site.