With revenue from Value Added Tax and Company Income Tax alone hitting a whopping mark of ₦2.94 trillion in 2020, all hope of tax revenue saving the day again in 2021 received a renewed optimism.
Contrary to this optimism, just two months into the new year, the drive to rake in more tax revenue seems to have hit another rock as the National Bureau of Statistics, NBS just today, Tuesday 16th February 2021 revealed that Consumer Price Index which measures inflation has increased by 16.47% in January 2021.
Taxmobile.Online’s understanding of the report also shows that food prices, food inflation also rose to 20.57 percent in the month under review while core inflation, which excludes the price of volatile agricultural produce stood at 11.85%.
The NBS added that the upward movement in food inflation was caused by increases in the prices of bread, cereals, potatoes, yam and other tubers, meat, fruits, oils and fats, vegetables, and fish.
Core inflation, which excludes the prices of agricultural items, stood at 11.85 percent in January 2021, up by 0.48 percentage points when compared with 11.37 percent recorded in December 2020.
On a year-on-year basis, food inflation was highest in Kogi (26.64 percent), Oyo (23.69 percent), and River (23.49 percent), while Ondo (17.20 percent), Abuja (16.73 percent), and Bauchi (16.37 percent) recorded the slowest rise.
See the full report by NBS:
“The percentage change in the average composite CPI for the twelve months ending January 2021 over the average of the CPI for the previous twelve months period was 13.62 percent, representing a 0.37percentage point increase over 13.25 percent recorded in December 2020.
“The urban inflation rate increased by 17.03 percent (year-on-year) in January 2021 from 16.33 percent recorded in December 2020, while the rural inflation rate increased by 15.92 percent in January 2021 from 15.20 percent in December 2020,”
“This rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fruits, Vegetable, Fish and Oils, and Fats.
“On a month-on-month basis, the food sub-index increased by 1.83 percent in January 2021, down by 0.22 percent points from 2.05 percent recorded in December 2020,” NBS said.
Theoretically, it is sufficient to note that a high inflation rate would increase the prices of goods and services.