The Federal Government of Nigeria has generated N2.94 trillion in income from value-added tax (VAT) and company income tax (CIT) in 2020, an increase of 10 percent higher when compared to 2019, the National Bureau of Statistics (NBS) stated in its latest report.
The Value Added Tax (VAT) accounted for N1.53 trillion or 52 per cent of the total figure, while N1.41 trillion was sourced from CIT.
The 2020 CIT income was distributed accordingly: local companies (N750.5 billion), foreign CIT payment (N380.8 billion), and others (N238.1 billion.
In the fourth quarter, the country generated N454.7 billion from VAT, making it the top-performing quarter. The first quarter was the poorest with 324.6 billion. The pattern was different from that of 2019, when the Q2 topped the year followed by the fourth and then first.
Recall that VAT was increased from five per cent to 7.5 per cent as contained in the Finance Act 2019. The increase took effect on February 1, 2020.
The CIT income generated in 2020 is 13.5 per cent short of the N1.63 trillion generated from the same source in 2019.
Breaking down the report, professional services contributed N162.32 billion during the period under review, This was followed by the manufacturing sectors with N154.15 billion.
CIT revenue drive with N180.3 billion and N96.4 billion respectively. While banks and other financial institutions’ contribution to the CIT fell by about 48 per cent (compared to N142.7 billion realised from the sector in 2019), professional service improved slightly, rising from N177.7 billion generated from the sector in 2019 to N180.3 billion.
Other top contributors to CIT incomes are other manufacturing (N80.2 billion), commerce and trading (N65.6 billion), breweries, bottling and beverages (N53.2 billion), state ministries and parastatals (N49 billion), transport and haulage (N45.5 billion), oil-producing (N40.8 billion) and federal ministries and parastatals (N22.5 billion).
Despite covid-19 lockdown and weak economic activities,Professional service recorded N162.3 billion to emerge as the top contributing sector followed by other manufacturing with N154.2 VAT revenue. Mining recorded N251 million to take the least position in terms of value addition to VAT revenue.
The government received N763 billion from non-import (local) VAT, N420.4 billion from non-import (foreign) VAT and N347.7 billion from the Nigeria Customs Service (NSC)-import VAT.
The laggards were the textile and garment industry (N360 million), mining (N343.2 million), local government councils (N1.1 billion), chemicals, paints and allied industries (N2 billion) and publishing, printing and packaging (N2.1 billion).
The non-import VAT realised expanded by 30.5 percent to N763.01 billion in 2020, against N584.6 billion in 2019.
Textile and garment recorded highest year-to-date (YTD) improvement with 100 per cent jump in its CIT generation while the contribution of petrochemical and petroleum refineries fell by 45 per cent YTD to top the least improved sectors.