The Federal Government has collected N11.5 trillion in taxes from business organisations during the administration of Major General Muhammadu Buhari (retd), according to findings by The PUNCH.Information Guide Nigeria
According to data sourced from National Bureau of Statistics Company Income Tax reports published between 2015 and 2022, CIT collected by the Federal Inland Revenue Service stood at N1.3tn when the President took office in 2015 and fell by 26% to N1tn in 2016 when the country’s economy entered a recession due to a significant drop in oil prices.
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Live, Study and Work in Canada. No Payment is Required! Hurry Now click here to Apply >> Immigrate to CanadaBetween 2017 and 2020, the government generated a total of N5.3 trillion.
Companies Income Tax is a tax on the profits of Nigerian corporations. It also includes the tax on profits earned by non-resident corporations doing business in Nigeria. Limited liability companies, including public limited liability companies, are required to pay the tax. It is also known as a corporate tax.
The CIT rate is 30% for large companies (those with a gross turnover greater than NGN 100 million), calculated on a prior-year basis (i.e. tax is charged on profits for the accounting year ending in the year preceding assessment).
In 2021, the Federal Government will earn N1.6tn from corporate tax, up from N2tn in the previous three quarters.
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The manufacturing, information and communication technology, and financial services sectors contributed the most to the CIT, according to the data.
A close examination of the Company Income Tax records for 2022 revealed a significant increase in taxes paid by businesses across the board.
For example, tax from firms in the information and communication sector increased by 158.51% from N51.05 billion in the third quarter of 2021 to N131.97 billion in the same period in 2022.
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Live, Study and Work in Canada. No Payment is Required! Hurry Now click here to Apply >> Immigrate to CanadaSimilarly, manufacturers paid the most taxes during the review period, as the Federal Government increased the number of taxes collectible by the Federal Inland Revenue Service from 39 to 61.JAMB portal
Some of the new taxes as contained in the schedule to the taxes and levies (Approved list for collection) Act (Amendment Order), 2015, include “national information technology development levy, economic development levy, environmental (ecological) fee or levy; inter-state road taxes; mining, milling and quarrying fee; infrastructure maintenance charge; social services contribution tax, and wharf landing fee where applicable.
Others are entertainment tax, produce sales tax, property tax (where applicable); fire service charge; slaughter or abattoir fee, where state finance is involved, etc.”
In the same vein, The PUNCH discovered that CIT paid by manufacturers increased by 52.3 percent from N91.2 billion in the third quarter of 2021 to N138.9 billion in the same quarter of 2022.
In an interview with The PUNCH, Michael Olawale-Cole, President of the Lagos Chamber of Commerce and Industry, said the productive sector was being overburdened by taxes due to the government’s inability to broaden the tax bracket and capture more taxpayers.
Olawale-Cole also advised the government to devise methods of protecting its revenue sources rather than resorting to aggressive taxation whenever there is a revenue shortfall.
He said, “So, the government needs money, but what we are saying is that the government is just putting pressure on the same people as opposed to developing to bring more people into the tax bracket. That is the major issue. There are a lot of people who are not paying taxes but are making money in this country.NYSC portal
“So, the government should find a way of catching them. They are improving because now government banks are linked with tax authorities. So, if income comes into your account, they have a way of knowing. They should do more of that. “This could be done through electronic means.
“We are saying they should not increase the tax rates all the time for the same people who are paying when there are more people who are not paying because if you tax them to a point, they will not be able to pay.”
Industry experts in the ICT sector, which ranks amongst the highest contributors to the CIT, have also raised concerns that the sector was being overburdened by multiple taxes.
A report titled “Taxing Nigeria’s subnational economies to oblivion” by SBM Intelligence recently revealed that the industry suffered from over-taxation because of its sustained growth in the last 20 years.
It said, “At the federal level, telecommunications companies are expected to pay taxes such as Companies Income Tax, the Capital Gains Tax, Withholding Taxes, Stamp Duty, National Industrial Training Fund, Employees Compensation Scheme, the Tertiary Education Trust Fund, National Housing Fund contributions, Contributory Pension Schemes, and customs duties.
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