In 2019, shutting down the gates of companies and corporate bodies across sectors to help fight the deadly Covid-19 pandemic may have helped slow down the raging speed of the novel virus as at when implemented but it has also harmed the revenue drive of the government to make more formidable gains when it comes to tax collection.
The flipside of the stringent lockdown measure across sectors is brought to light as yet again, Nigeria Company Income Tax drops. For 2020, it dropped to ₦1.41 trillion indicating a 13.4% decline when compared to ₦1.63 trillion recorded in 2019. This is according to the latest CIT report released by the National Bureau of Statistics (NBS).
The report has it that, this consecutive drop amounting to ₦1.41trillion represents a sharp drop from 2018 to the year under review. This means a 13.4% decline as against ₦1.62 trillion in 2019 and a 0.49% decline when compared to ₦1.42 trillion recorded in 2018.
Know where the CIT is coming from
- Banks and financial institutions – ₦96.4 billion
- Commercial and trading -₦68.5 billion.
- Breweries, bottling, and beverages ₦53.2 billion
- ₦790.6 -locally, accounting for 56.1% of the total company income tax collections.
- ₦238.1 billion – other payments, which represents 16.9% of the total collections.
- Foreign CIT payments- ₦380.8 billion accounted for 27% of the total collections.
Taxmobile.Online also gathered that professional services top the list of sectors with the highest contributions at ₦180.26 billion, followed by other manufacturing sectors with ₦100.4 billion company income tax payment.
A total of ₦343 million was received from the mining industry, representing the sector with the lowest CIT remittance in 2020. The textile and Garment industry jumped over 100%.
The textile and garment industry recorded the highest year-on-year increase in CIT remittances, as it increased its company income tax by 100.23% from ₦179.8 million recorded in 2019 to ₦359.9 million in 2020.
Transport and haulage services followed with a gain of 46.28% to stand at N45.6 billion, publishing, printing, paper packaging grew by 36.4% to stand at ₦2.1 billion.
Also, Stevedoring, clearing, and forwarding grew its company income tax by 28.5% to stand at N7.2 billion from an initial remittance of ₦5.6 billion in 2019.
On another flip side, petrochemical and petroleum refineries recorded a 45.4% decline in CIT collected in 2020, closely followed by the federal ministries and parastatals, which recorded a decline of 38.9% to stand at ₦22.5 billion.
The Truth of the Matter
It is high time for the government to put on its creative hat, to look at other ways to rake in more revenue to avoid placing too much financial burden on corporate entities still trying to catch their breath from the very much around Covid-19 pandemic.