Manufacturing, ICT lead as Nigeria rakes in N5.3trn from VAT, CIT

Manufacturing, information and communication, and mining and quarrying sectors were the largest contributors to local VAT as the Federal Government generated N5.3 trillion from Value Added Tax (VAT) and Company Income Tax in 2022.

This represents a 42.14 per cent increase from the N3.76 trillion that was raised in 2021.

A breakdown from the National Bureau of Statistics (NBS) report showed that the federal government raised N2.51 trillion from VAT and N2.83 trillion from CIT.

Nigerian law states that CIT is a 30 percent tax imposed on the profit of companies and VAT is a 7.5 per cent consumption tax paid when goods are purchased, and services rendered and borne by the final consumer.

For CIT, manufacturing, information and communication, and financial and insurance were the top three sectors that contributed to local CIT.

In 2022, the government received N477.43bn VAT from the manufacturing sector, N268.84bn VAT from the information and communication sector, and N158.49bn from the mining and quarrying sector.

It received N468.59bn CIT from the manufacturing sector, N362.26bn from the IT sector, and N208.93bn from the financial and insurance sector.

Commenting on the contribution of the sectors to VAT in the fourth quarter of 2022, the NBS said, “In terms of sectoral contributions, the top three largest shares in the fourth quarter of 2022 were manufacturing with 32.17 per cent; Information and communication with 18.05 per cent; and Public administration and defence, compulsory social security with 9.87 per cent.”