The Federal Government saw a significant boost in tax revenue, raising N4.03 trillion through Company Income Tax (CIT) and Value Added Tax (VAT) in the second quarter of 2024.

This marks a sharp increase compared to the first quarter of the year, highlighting the government’s strengthened tax collection efforts.

According to data from the National Bureau of Statistics (NBS), N2.47 trillion was generated from CIT between April and June 2024, while VAT contributed N1.56 trillion during the same period. This represents a 67 per cent increase in tax revenue from the N2.41 trillion collected in the first quarter, driven primarily by a remarkable 150.83 per cent surge in Company Income Tax, which rose from N984.61 billion in Q1 2024 to N2.47 trillion in Q2.

The NBS report showed that local CIT payments accounted for N1.35 trillion, while foreign CIT payments added N1.12 trillion. On a quarter-on-quarter basis, the Agriculture, Forestry, and Fishing sector posted the highest growth in CIT contributions, soaring by 474.50 per cent. This was followed by Financial and Insurance Activities, which grew by 429.76 per cent, and the Manufacturing sector, up by 414.15 per cent.

Conversely, the sectors with the lowest growth rates in CIT were Activities of Households as Employers, which declined by 30.22 per cent, and Activities of Extraterritorial Organisations, which fell by 15.67 per cent. The largest sectoral contributors in Q2 2024 were Financial and Insurance Activities (15.53 per cent), Manufacturing (8.99 per cent), and Information and Communication (7.84 per cent).

Year-on-year, CIT collections in Q2 2024 were up by 59.52 per cent compared to the N1.55 trillion collected in Q2 2023, underscoring the sustained improvement in tax revenue.

VAT collections in Q2 2024 amounted to N1.56 trillion, reflecting a quarter-on-quarter growth rate of 9.11 per cent from N1.43 trillion in the previous quarter. Local VAT payments contributed N792.58 billion, while Foreign VAT Payments and Import VAT contributed N395.74 billion and N372.95 billion, respectively.

Human Health and Social Work Activities led VAT growth with a 98.44 per cent increase, followed by Agriculture, Forestry, and Fishing, which grew by 70.26 per cent. Water Supply, Sewerage, Waste Management, and Remediation Activities also saw significant growth at 59.75 per cent.

However, Activities of Households as Employers recorded the lowest VAT growth, declining by 46.84 per cent, followed by Real Estate Activities, which dropped by 42.59 per cent.

In terms of sectoral VAT contributions, Manufacturing led with 11.78 per cent, followed by Information and Communication (9.02 per cent) and Mining and Quarrying (8.79 per cent).

Activities of Households as Employers and Extraterritorial Organisations made up the smallest shares, contributing 0.00 per cent and 0.01 per cent, respectively.

Year-on-year, VAT collections saw an impressive 99.82 per cent increase from Q2 2023, reflecting robust growth across various sectors of the economy.

The significant rise in both CIT and VAT revenues in Q2 2024 demonstrates the federal government’s improved tax collection framework and the strengthening of its fiscal capacity amidst challenging economic conditions.

Culled from Daily Times Nigeria