CIT collection rises in seven sectors despite overall decline in Q1

By Esther Agbo

Despite an overall decline in Company Income Tax (CIT) collection in the first quarter of 2024, seven sectors of the Nigerian economy reported an increase, according to the latest data from the National Bureau of Statistics (NBS).

CIT revenue fell by 12.87 per cent quarter-on-quarter, dropping from N1.13 trillion in Q4 2023 to N984.61 billion in Q1 2024. However, on a year-on-year basis, total CIT collection surged by an impressive 109.93 per cent, up from N469.01 billion in Q1 2023.

According to the NBS, among the 21 sectors where CIT was collected, the seven that recorded gains in Q1 2024 compared to the previous quarter are : Financial and insurance activities, which saw a modest increase of 2.56 per cent, Mining and quarrying, up by 21.29 per cent, Public administration, defence, and compulsory social services, which experienced a rise of 24.60 per cent, Water supply, sewerage, and waste management, with an uptick of 3.52 per cent, Activities of extraterritorial organisations and bodies, up by 22.59 per cent, Households as employers, with a substantial increase of 330.42 per cent and Administrative and support services, which grew by 33.18 per cent.

Conversely, the remaining 14 sectors saw declines, with the manufacturing sector experiencing the steepest drop of 70 per cent falling from N145.06 billion to N43.17 billion. This was followed by a 69.14 per cent decrease in the electricity, gas, steam, and air conditioning supply sector.

In the period under review, local CIT payments decreased significantly by 27.61 per cent, from N533.93 billion to N386.48 billion. In contrast, foreign CIT payments saw a marginal increase of 0.34 per cent, rising to N598.13 billion from N596.10 billion in Q4 2023.

The broader economic context painted by FSDH Merchant Bank’s Q1 Macroeconomic Report highlights the challenges facing the Nigerian economy which includes high inflation, driven by currency depreciation amongst others.
FSDH analysts emphasize the need for sustained reforms and a collaborative effort between fiscal and monetary authorities to stabilize the economy and ensure a brighter outlook.

“This surge was largely influenced by many factors, including currency depreciation, sluggish agricultural productivity, and increased transport costs due to fuel subsidy removal and regional instability. These developments underscore the significant impact of non-monetary elements on Nigeria’s inflationary trends. All of these painted a grim picture of economic instability,” FSDH said.

As the government and financial authorities continue to navigate these economic challenges, the mixed results in CIT collection underlines the complex and multifaceted nature of Nigeria’s economic landscape.

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