Nigeria’s economy saw a significant revenue surge from Value Added Tax (VAT) and Company Income Tax (CIT) in the fourth quarter of 2023, as per the latest statistics released by the National Bureau of Statistics (NBS).
According to the report, the combined collections from VAT and CIT totaled approximately N2.33 trillion in the final quarter of the year.
On VAT: VAT collections for Q4 2023 soared to N1.20 trillion, marking a substantial 26.61 per cent increase quarter-on-quarter. This surge was driven by a combination of local payments, foreign VAT payments, and import VAT contributions. Notably, sectors like agriculture, mining, and quarrying experienced impressive growth rates, while others, such as extraterritorial organisations and the financial sector, witnessed declines.
The report stated, “On the aggregate, Value Added Tax (VAT) for Q4 2023 was reported at N1.20 trillion, showing a growth rate of 26.61 per cent on a quarter-on-quarter basis from N948.07 billion in Q3 2023. Local payments recorded were N630.00 billion, Foreign VAT Payments were N326.27 billion, while import VAT contributed N244.04 billion in Q4 2023. On a quarter-on-quarter basis, agriculture, mining and quarrying recorded the highest growth rate with 63.75 per cent, followed by the other services activities with 61.98 per cent. On the other hand, activities of extraterritorial organisations and bodies activities had the lowest growth rate with –19.44 per cent, followed by financial and insurance with –8.46 per cent.”
On CIT: Company Income Tax (CIT) for Q4 2023 stood at N1.13 trillion, indicating a 35.40 per cent decrease from the previous quarter. However, this decline was balanced by contributions from local payments and foreign CIT payments. Notably, sectors like electricity, gas, steam, and air conditioning supply recorded significant growth rates, while others experienced declines.
The CIT report read, “On the aggregate, Company Income Tax (CIT) for Q4 2023 was reported at N1.13 trillion, indicating a growth rate of –35.40 per cent on a quarter-on-quarter basis from N1.75 trillion in Q3 2023. Local payments received were N533.93 billion, while Foreign CIT Payment contributed N596.10 billion in Q4 2023. On a quarter-on-quarter basis electricity, gas, steam and air conditioning supply recorded the highest growth rate with 79.65 per cent, followed by construction with 57.86 per cent. On the other hand, activities of Information and communication –69.44, and Public administration and defence, compulsory social security –23.75 had the lowest growth rate.”
Comparison: In 2023, Nigeria witnessed substantial growth in tax revenue, with VAT collections increasing by 45.02 per cent and CIT collections by 73.14 per cent compared to 2022. Together, VAT and CIT contributed a total of N8.54 trillion to Nigeria’s coffers in 2023, showcasing a remarkable increase from the previous year’s total of N5.34 trillion.
