Nigeria’s economy witnessed a significant influx of revenue from Value Added Tax and Company Income Tax in the fourth quarter of 2023, according to the latest figures released by the National Bureau of Statistics.
In the final quarter of the year, the combined VAT and CIT collections amounted to approximately N2.33 trillion, according to nairametrics.
VAT revenues amounted to N1.20 trillion in the fourth quarter of 2023, representing a significant increase of 26.61% compared with Q3 2018’s revenue of N948.07 billion.
The combination of local payments amounting to N630.00 billion, foreign VAT payment at N326.27 billion and import VAT contributions worth N244.04 billion was responsible for this increase.
Sector-wise, agriculture, mining, and quarrying led the growth rates with an impressive 63.75% increase, closely followed by other services activities at 61.98%.
However, not all sectors have been able to cope with the decrease of 19.44% in growth rates for extraterritorial organisations activities and bodies as well as a decline of 8.46% among financial and insurance sector.
The main contributors to VAT collection were manufacturing, information, communication as well as mining and quarrying, highlighting the different sources of tax revenue for the country.
The year-on-year comparison further illustrates the substantial growth in VAT collections, with a 72.12% increase from Q4 2022.
The VAT report read, “On the aggregate, Value Added Tax for Q4 2023 was reported at N1.20 trillion, showing a growth rate of 26.61% 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%, followed by the other services activities with 61.98%. On the other hand, activities of extraterritorial organisations, and bodies activities had the lowest growth rate with –19.44%, followed by financial and insurance with –8.46%.
“In terms of sectoral contributions, the top three largest shares in Q4 2023 were manufacturing with 13.24%, information and communication with 10.02% and mining and quarrying with 7.91%. Nevertheless, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organizations and bodies, and water supply, sewerage, waste management and remediation activities with 0.03% and real estate activities 0.07%, agriculture, forestry and fishing with 0.10%. However, on a year-on-year basis, VAT collections in Q4 2023 increased by 72.12% from Q4 2022.”
Meanwhile, The Company Income Tax was N1.13 trillion, indicating a 35.40% decrease from the previous quarter’s N1.75 trillion.
Local payments contributions of N533.93 billion and foreign CIT payments of N596.10 billion balanced the downturn.
Electricity, gas, steam, and air conditioning supply sector, particularly recorded the highest growth rate at 79.65%, with construction also showing significant growth.
Manufacturing maintained its position as a major contributor to CIT, alongside financial and insurance activities and mining and quarrying, underscoring the critical role of these sectors in Nigeria’s tax revenue framework.
The CIT report read, “On the aggregate, Company Income Tax for Q4 2023 was reported at N1.13 trillion, indicating a growth rate of –35.40% 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%, followed by construction with 57.86%. 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.
“In terms of sectoral contributions, the top three largest shares in Q4 2024 were Manufacturing 12.84%, Financial and insurance activities 6.25%, and Mining and quarrying 5.90%. Nevertheless, Activities of households as employers, undifferentiated goods- and services producing activities of households for own use 0.00%, Water supply, sewerage, waste management and remediation activities 0.02%, and Activities of extraterritorial organizations and bodies 0.07%.”
The year 2023 marked a period of notable growth in tax revenue for Nigeria, with VAT collections increasing by 45.02% to N3.64 trillion from N2.51 trillion in 2022. Similarly, CIT collections saw a rise of 73.14%, amounting to N4.9 trillion up from N2.83 trillion the previous year.
In 2023, VAT and CIT accounted for a total of N8.54 trillion to the nation’s treasury, significantly exceeding that of the preceding year of N5.34 trillion dollars.
