Finance & EconomyNews

Nigeria company income tax revenue drops to N1.41 trillion in 2020

Nigeria’s company income tax revenue stood at N1.41 trillion in 2020, indicating a 13.35% decline when compared to N1.63 trillion recorded in the previous year.

This is according to the latest CIT report released by the National Bureau of Statistics (NBS).

According to the report, the latest figure represents the second consecutive drop in company income tax revenue. The N1.41 trillion CIT collection represents a 13.4% decline as against N1.62 trillion in 2019 and a 0.49% decline when compared to N1.42 trillion recorded in 2018.

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Others on the list include; Banks and financial institutions (N96.4 billion), commercial and trading (N68.5 billion), while breweries, bottling, and beverages remitted N53.2 billion in company income tax.

Breakdown

  • A total of N790.6 billion was collected locally, accounting for 56.1% of the total company income tax collections.
  • N238.1 billion was in form of other payments, which represents 16.9% of the total collections.
  • while Foreign CIT payments (N380.8 billion) accounted for 27% of the total collections.
  • Professional services top the list of sectors with the highest contributions at N180.26 billion, followed by other manufacturing sector with N100.4 billion company income tax payment.
  • A total of N343 million was received from the mining industry, representing the sector with the lowest CIT remittance in 2020.

Textile and Garment industry jumped over 100%

The textile and garment industry recorded the highest year-on-year increase in CIT remittances, as it increased its company income tax by 100.23% from N179.8 million recorded in 2019 to N359.9 million in 2020.

  • Transport and haulage services followed with a gain of 46.28% to stand at N45.6 billion, publishing, printing, paper packaging grew by 36.4% to stand at N2.1 billion.
  • Also, Stevedoring, clearing, and forwarding grew its company income tax by  28.5% to stand at N7.2 billion from an initial remittance of N5.6 billion in 2019.
  • On the flip side, petro-chemical and petroleum refineries recorded 45.4% decline in CIT collected in 2020, closely followed by the federal ministries and parastatals, which recorded a decline of 38.9% to stand at N22.5 billion.

The decline in company income tax could be attributed to the disruption caused by the covid induced lockdown, which affected most business organisations for most parts of the year.

Also, recall that Nairametrics had reported earlier in 2020, that the federal government has decided to exempt small businesses with an annual turnover of less than N25 million from Company Income Tax.

Bottom line: Nigeria’s economy was ravaged by the covid-19 outbreak in 2020, forcing restrictions on movement across the country. This affected the profitability of most businesses in the country, consequently affecting company income tax revenue generated by the Nigerian government.

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