Corporate Tax, VAT drive federation account to N6.86tn – CBN
Receipts into the federation account increased by 7.48% to N6.86 trillion in the third quarter of 2024, according to the latest Economic Report from the Central Bank of Nigeria.
The report highlights that the increase in gross federation account earnings was fueled by higher receipts from corporate tax and value-added tax.
The Federal Inland Revenue Service defines corporate tax as a levy on the profits of companies operating in Nigeria, regulated under the Companies Income Tax Act.
VAT, on the other hand, is a tax imposed on the consumption of goods and services.
Non-oil revenue totaled N5.56 trillion, while oil revenue accounted for the remaining balance, according to the report.
The CBN report said, “Gross federation account earnings improved, occasioned by higher receipts from non-oil revenue. At N6.86tn, the provisional gross federation account receipt was 7.48 per cent above the level in the preceding quarter but 23.71 per cent short of the benchmark.
“The increase was due largely to higher receipts from corporate tax and value-added tax. The composition of gross federation revenue showed that non-oil revenue remained dominant, accounting for 81.00 per cent, while oil revenue constituted the balance.
“Non-oil revenue, at N5.56tn, was 19.48 and 50.36 per cent above the levels in the preceding quarter and target, respectively. The increase relative to the preceding quarter was driven largely by higher collections from corporate tax and value-added tax. The increase relative to quarterly targets reflects improved revenue collection relative to budget expectations.”
The apex bank revealed that in the third quarter of 2024, oil revenue dropped by 24.72% to N1.30 trillion compared to Q2 2024, due to lower receipts from petroleum profit, taxes, and royalties.
The revenue was also 75.39% below the quarterly target, primarily due to shut-ins caused by aging oil pipelines and installations.
From the federally collected revenue of N6.87 trillion, about N3.92 trillion was distributed to the three tiers of government.
The federal, state, and local governments received N1.27 trillion, N1.36 trillion, and N0.99 trillion, respectively, while the remaining N0.30 trillion was allocated to the 13% Derivation Fund for oil-producing states.
