Finance & EconomyNews

Manufacturers account for 28.76 per cent of FIRS collections in Q3 2022

Despite the lingering challenges in the real sector, Nigeria’s manufacturing sector, in Q3, 2022 contributed 28.76 per cent to lift tax collection indices of the Federal Inland Revenue Services (FIRS) overall revenue.

According to the National Bureau of Statistics (NBS), Company Income tax for the third quarter of 2022, showed that the manufacturing sector, contributed 28.76 per cent in terms of sectoral contributions followed by the ICT sector, which contributed 27.31 per cent, while the financial services sector ranked third at 8.81 per cent contribution.

The NBS, says the aggregate Company Income Tax (CIT) was reported at N810.19 billion for Q3 2022, in its recent report. According to the report, this shows a growth rate of 13.41 per cent on a quarter-on-quarter basis from N714.40 billion in Q2 2022.

The report said local payments received were N483.17 billion, while foreign CIT payment contributed N327.02 billion in Q3 2022. It said on a quarter-on-quarter basis, the arts, entertainment and recreation activities recorded the highest growth rate with 93.33 per cent, followed by agriculture, forestry, and fishing with 75.38 per cent.

On the other hand, accommodation and food service activities had the lowest growth rate at 64.81 per cent. “This was followed by water supply, sewerage, waste management, and remediation activities at -64.75 per cent.”

It says tax collections from the ICT sector rose to N131.97 billion as against N53.36 billion in the corresponding period in 2021. On a quarter by quarter comparison, tax collection fell by 15.26 per cent from N155.74 billion.

As part of the drive to increase its revenue from non-oil sources and support the implementation of the 2022 budget, the Federal Government made certain amendments to the Finance Act 2022.

Part of the changes was the introduction of taxes on Non-Resident Companies (NRCs) with digital presence in Nigeria. Section 30 was amended by introducing a new sub-section that allows the government to assess non-resident companies with a digital Significant Economic Presence (SEP) in Nigeria; to tax on a fair and reasonable percentage of their turnover attributable to the SEP in the instance where there is no assessable profit, or the assessable profit is less than what is to be expected from that type of business or cannot be ascertained.

As a reflection of increased activities in the information and communication technology (ICT) space, especially on the back of the outbreak of COVID-19, Company Income Tax (CIT) from ICT firms soared Year-on-Year (YoY) by a huge 147.30 percent in the third quarter ended September 30, 2022 (Q3’22).

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