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Thursday, August 18, 2022

CIT Growth Masks Poor Contribution from Most Sectors

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Only 11 out of 30 sectors recorded growth in Company Income Tax (CIT) payments in the first quarter (Q1) of 2021, a development that shows that major parts of the economy are still struggling despite the overall increase in  CIT collections by the government.

Data on Company Income Tax breakdown by sectors for Q1 2021 reflected that the sum of N392.77bn was generated as CIT as against N295.72bn generated in Q4 2020 and N295.68bn generated in Q1 2020 representing 32.82 percent increase Quarter-on-Quarter and 32.84 percent increase Year-on-Year.

Breweries, Bottling and Beverages generated the highest amount of CIT with N23.26bn generated and closely followed by Professional Services including Telecoms which generated N18.17bn, State Ministries & Parastatals generated N17.35bn while Textile and Garment Industry generated the least and closely followed by Mining and Automobiles and Assemblies with N13.49m, N34.40m and N73.57m generated respectively.

Out of the total amount generated in Q1 2021, N152.33bn was generated as CIT locally while N184.59bn was generated as foreign CIT payment. The balance of N55.85bn was generated as CIT from other payments.

Major sectors such as Agriculture, Banks and Financial institutions, commercial and trading, conglomerates, mining, oil marketing, petrochemicals and printing and publishing all saw declines in CIT payments year on year, as well as quarter on quarter.

The sectors are a major contributor to the Nigerian economy and it should be a worry to the government that recovery in these sectors are largely still anaemic.

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