Significant Increase in Nigeria’s Value Added Tax and Company Income Tax in Q3

The National Bureau of Statistics has released a report indicating a notable upsurge in the collection of Value Added Tax (VAT) during the third quarter of 2023, amounting to a total of N948.07 billion. This figure marks a substantial increase from the N781.35 billion collected in the previous quarter. The report specifies that domestic VAT payments accounted for N522.08 billion, while foreign VAT payments totalled N204.58 billion, and import VAT contributed N221.41 billion in Q3. This surge in VAT collection serves as a clear indicator of thriving economic activities within the country.

Furthermore, the report highlights the sectors that experienced the highest growth rates, with agriculture, forestry, and fishing leading at 91.87%, followed by extraterritorial organizations and bodies at 80.25%. In contrast, the real estate and construction sectors reported declines with growth rates of -37.68% and -9.54% respectively. The manufacturing, information and communication, and financial and insurance sectors emerged as the top contributors to the overall VAT collection in Q3 2023.

Moreover, the report notes a significant year-on-year increase in VAT collections, demonstrating a growth of 51.60% from the third quarter of 2022. This substantial increase underlines a positive trend in economic activities and consumer spending within the country.

Additionally, the report indicates an increase in Company Income Tax (CIT) amounting to N1.75 trillion in Q3, reflecting a 14.27% increase from the previous quarter. Domestic CIT payments totalled N651.63 billion, while foreign CIT payments contributed N1.10 trillion. The education sector exhibited the highest growth rate for CIT at 59.60%, followed by public administration and defence, compulsory social security at 57.04%. Conversely, activities of households as employers and the water supply, sewerage, and waste management sectors reported negative growth rates.

The information and communication, manufacturing, and mining and quarrying sectors were identified as the top contributors to the overall CIT collection in Q3 2023. The substantial increase in VAT and CIT collections bodes well for the country, signifying positive growth and economic stability.

These impressive figures underscore the resilience and strength of Nigeria’s economy. The significant contributions from various sectors indicate a promising outlook for economic growth in the upcoming quarters. The rise in tax collections indicates a positive trend in business activities, consumer spending, and overall economic development within the nation. This data serves as a testament to the economic progress and potential for future investments in Nigeria.